THE
GOVERNMENT SERVICE INSURANCE SYSTEM ACT OF 1997
REPUBLIC ACT NO. 8291
AN ACT AMENDING PRESIDENTIAL DECREE NO. 1146, AS
AMENDED, EXPANDING AND INCREASING THE COVERAGE
AND BENEFITS OF THE GOVERNMENT SERVICE INSURANCE
SYSTEM, INSTITUTING REFORMS THEREIN AND FOR OTHER
PURPOSES.
SECTION 1. Presidential Decree No. 1146, as amended, otherwise
known as the "Revised Government Service Insurance Act of 1977",
is hereby further amended to read as follows:
"SECTION 1. Title. -The title of this Act shall be: "The Government
Service Insurance System Act of 1997."
"A. DEFINITIONS
"SEC. 2. Definition of terms.- Unless the context otherwise
indicates, the following terms shall mean:
"(a) GSIS- The Government Service Insurance System created by
Commonwealth Act No. 186;
"(b) Board- The Board of Trustees of the Government Service
Insurance System;
"(c) Employer- The national government, its political
subdivisions, branches, agencies or instrumentalities, including
government-owned or controlled corporations, and financial
institutions with original charters, the constitutional
commissions and the judiciary;
"(d) Employee or Member- Any person receiving compensation
while in the service of an employer as defined herein, whether by
election or appointment, irrespective of status of appointment,
including barangay and Sanggunian officials;
"(e) Active Member- A member who is not separated from the
service;
"(f) Dependents- Dependents shall be the following: (a) the
legitimate spouse dependent for support upon the member or
pensioner; (b) the legitimate, legitimated, legally adopted child,
including the illegitimate child, who is unmarried, not gainfully
employed, not over the age of majority, or is over the age of
majority but incapacitated and incapable of self-support due to a
mental or physical defect acquired prior to age of majority; and
(c) the parents dependent upon the member for support;
"(g) Primary beneficiaries- The legal dependent spouse until
he/she remarries and the dependent children;
"(h) Secondary beneficiaries- The dependent parents and, subject
to the restrictions on dependent children, the legitimate
descendants;
"(i) Compensation- The basic pay or salary received by an
employee, pursuant to his election/appointment, excluding per
diems, bonuses, overtime pay, honoraria, allowances and any
other emoluments received in addition to the basic pay which are
not integrated into the basic pay under existing laws;
"(j) Contribution- The amount payable to the GSIS by the member
and the employer in accordance with Section 5 of this Act;
"(k) Current Daily Compensation- The actual daily compensation
or the actual monthly compensation divided by the number of
working days in the month of contingency but not to exceed
twenty-two (22) days;
"(l) Average Monthly Compensation (AMC)- The quotient arrived
at after dividing the aggregate compensation received by the
member during his last thirty-six (36) months of service
preceding his separation/retirement/ disability/death by thirty-
six (36), or by the number of months he received such
compensation if he has less than thirty-six (36) months of
service:Provided, That the average monthly compensation shall in
no case exceed the amount and rate as may be respectively set by
the Board under the rules and regulations implementing this Act
as determined by the actuary of the GSIS: Provided, further,That
initially the average monthly compensation shall not exceed Ten
thousand pesos (P10,000.00), and premium shall be nine percent
(9%) and twelve percent (12%) for employee and employer
covering the AMC limit and below and two percent (2%) and
twelve percent (12%) for employee and employer covering the
compensation above the AMC limit;
"(m) Revalued average monthly compensation- An amount equal
to one hundred seventy percent (170%) of the first One thousand
pesos (P1,000.00) of the average monthly compensation plus one
hundred percent (100%) of the average monthly compensation in
excess of One thousand pesos (P1,000.00);
"(n) Lump sum- The basic monthly pension multiplied by sixty
(60);
"(o) Pensioner- Any person receiving old-age permanent total
disability pension or any person who has received the lump sum
excluding one receiving survivorship pension benefits as defined
in Section 20 of this Act;
"(p) Gainful Occupation- Any productive activity that provided the
member with income at least equal to the minimum
compensation of government employees;
"(q) Disability- Any loss or impairment of the normal functions of
the physical and/or mental faculty of a member which reduces or
eliminates his/her capacity to continue with his/her current
gainful occupation or engage in any other gainful occupation;
"(r) Total Disability- Complete incapacity to continue with his
present employment or engage in any gainful occupation due to
the loss or impairment of the normal functions of the physical
and/or mental faculties of the member;
"(s) Permanent Total Disability- Accrues or arises when recovery
from the impairment mentioned in Section 2 (Q) is medically
remote;
"(t) Temporary Total Disability- Accrues or arises when the
impaired physical and/or mental faculties can be rehabilitated
and/or restored to their normal functions;
"(u) Permanent Partial Disability- Accrues or arises upon the
irrevocable loss or impairment of certain portion/s of the
physical faculties, despite which the member is able to pursue a
gainful occupation.
"B. MEMBERSHIP IN THE GSIS
"SEC. 3. Compulsory Membership. - Membership in the GSIS shall
be compulsory for all employees receiving compensation who
have not reached the compulsory retirement age, irrespective of
employment status, except members of the Armed Forces of the
Philippines and the Philippine National Police, subject to the
condition that they must settle first their financial obligation with
the GSIS, and contractuals who have no employer and employee
relationship with the agencies they serve.
"Except for the members of the judiciary and constitutional
commissions who shall have life insurance only, all members of
the GSIS shall have life insurance, retirement, and all other social
security protections such as disability, survivorship, separation,
and unemployment benefits.
"SEC. 4. Effect of Separation from the Service. - A member
separated from the service shall continue to be a member, and
shall be entitled to whatever benefits he has qualified to in the
event of any contingency compensable under this Act.
"C. SOURCES OF FUNDS
"SEC. 5. Contributions. - (a) It shall be mandatory for the member
and employer to pay the monthly contributions specified in the
following schedule:
"Monthly Compensation Percentage of Monthly
Compensation
Payable by
Member Employer
I. Maximum Average
Monthly Compensation
(AMC) Limit and Below 9.0% 12.0%
II. Over the Maximum
AMC Limit
-Up to the Maximum
AMC Limit 9.0% 12.0%
-In Excess of the
AMC Limit 2.0% 12.0%
"Members of the judiciary and constitutional commissioners shall
pay three percent (3%) of their monthly compensation as
personal share and their employers a corresponding three
percent (3%) share for their life insurance coverage.
"(b) The employer shall include in its annual appropriation the
necessary amounts for its share of the contributions indicated
above, plus any additional premiums that may be required on
account of the hazards or risks of its employees occupation.
"(c) It shall be mandatory and compulsory for all employers to
include the payment of contributions in their annual
appropriations. Penal sanctions shall be imposed upon employers
who fail to include the payment of contributions in their annual
appropriations or otherwise fail to remit the accurate/exact
amount of contributions on time, or delay the remittance of
premium contributions to the GSIS. The heads of offices and
agencies shall be administratively liable for non-remittance or
delayed remittance of premium contributions to the GSIS.
"SEC. 6. Collection and Remittance of Contributions. - (a) The
employer shall report to the GSIS the names of all its employees,
their corresponding employment status, positions, salaries and
such other pertinent information, including subsequent changes
therein, if any, as may be required by the GSIS; the employer shall
deduct each month from the monthly salary or compensation of
each employee the contribution payable by him in accordance
with the schedule prescribed in the rules and regulations
implementing this Act.
"(b) Each employer shall remit directly to the GSIS the employees
and employers contributions within the first ten (10) days of the
calendar month following the month to which the contributions
apply. The remittance by the employer of the contribution to the
GSIS shall take priority over and above the payment of any and all
obligations, except salaries and wages of its employees.
"SEC. 7. Interest on Delayed Remittances. - Agencies which delay
the remittance of any and all monies due the GSIS shall be
charged interests as may be prescribed by the Board but not less
than two percent (2%) simple interest per month. Such interest
shall be paid by the employers concerned.
"SEC. 8. Government Guarantee. - The government of the Republic
of the Philippines hereby guarantees the fulfillment of the
obligations of the GSIS to its members as and when they fall due.
"D. BENEFITS
"SEC. 9. Computation of the Basic Monthly Pension. - (a) The basic
monthly pension is equal to:
"1) thirty-seven and one-half percent (37.5%) of the revalued
average monthly compensation; plus
"2) two and one-half percent (2.5%) of said revalued average
monthly compensation for each year of service in excess of (15)
years: Provided, That the basic monthly pension shall not exceed
ninety percent (90%) of the average monthly compensation.
"(b) The basic monthly pension may be adjusted upon the
recommendation of the President and General Manager of the
GSIS and approved by the President of the Philippines in
accordance with the rules and regulations prescribed by the
GSIS:Provided, however, that the basic monthly pension shall not
be less than One thousand and three hundred pesos
(P1,300.00):Provided, further, that the basic monthly pension for
those who have rendered at least twenty (20) years of service
after the effectivity of this Act shall not be less than Two thousand
four hundred pesos (P2,400.00) a month.
"SEC. 10. Computation of Service. - (a) The computation of service
for the purpose of determining the amount of benefits payable
under this Act shall be from the date of original
appointment/election, including periods of service at different
times under one or more employers, those performed overseas
under the authority of the Republic of the Philippines, and those
that may be prescribed by the GSIS in coordination with the Civil
Service Commission.
"(b) All service credited for retirement, resignation or separation
for which corresponding benefits have been awarded under this
Act or other laws shall be excluded in the computation of service
in case of reinstatement in the service of an employer and
subsequent retirement or separation which is compensable
under this Act.
"For the purpose of this section, the term service shall include
full-time service with compensation: Provided, that part-time and
other services with compensation may be included under such
rules and regulations as may be prescribed by the GSIS.
"SEPARATION BENEFITS
"SEC. 11. Separation Benefits. - The separation benefits shall
consist of: (a) a cash payment equivalent to one hundred percent
(100%) of his average monthly compensation for each year of
service he paid contributions, but not less than Twelve thousand
pesos (P12,000) payable upon reaching sixty (60) years of age
upon separation, whichever comes later: Provided, that the
member resigns or separates from the service after he has
rendered at least three (3) years of service but less than fifteen
(15) years; or
"(b) a cash payment equivalent to eighteen (18) times his basic
monthly pension at the time of resignation or separation, plus an
old-age pension benefit equal to the basic monthly pension
payable monthly for life upon reaching the age of sixty
(60):Provided, that the member resigns or separates from the
service after he has rendered at least fifteen (15) years of service
and is below sixty (60) years of age at the time of resignation or
separation.
"SEC. 12. Unemployment or Involuntary Separation Benefits. -
Unemployment benefits in the form of monthly cash payments
equivalent to fifty percent (50%) of the average monthly
compensation shall be paid to a permanent employee who is
involuntarily separated from the service due to the abolition of
his office or position usually resulting from
reorganization:Provided, That he has been paying integrated
contributions for at least one (1) year prior to separation.
Unemployment benefits shall be paid in accordance with the
following schedules:
"Contributions Made Benefit Duration
1 year but less than 3 years 2 months
3 or more years but less than 6 years 3 months
6 or more years but less than 9 years 4 months
9 or more years but less than 11 years 5 months
11 or more years but less than 15 years 6 months
"The first payment shall be equivalent to two (2) monthly
benefits. A seven-day (7) waiting period shall be imposed on
succeeding monthly payments.
"All accumulated unemployment benefits paid to the employee
during his entire membership with the GSIS shall be deducted
from voluntary separation benefits.
"The GSIS shall prescribe the detailed guidelines in the
operationalization of this section in the rules and regulations
implementing this Act.
"RETIREMENT BENEFITS
"SEC. 13. Retirement Benefits. - (a) Retirement benefits shall be:
"(1) the lump sum payment as defined in this Act payable at the "(d) The following disabilities shall be deemed total and
time of retirement plus an old-age pension benefit equal to the permanent:
basic monthly pension payable monthly for life, starting upon
expiration of the five-year (5) guaranteed period covered by the "(1) complete loss of sight of both eyes;
lump sum; or
"(2) cash payment equivalent to eighteen (18) months of his basic "(2) loss of two (2) limbs at or above the ankle or wrist;
monthly pension plus monthly pension for life payable
immediately with no five-year (5) guarantee. "(3) permanent complete paralysis of two (2) limbs;
"(b) Unless the service is extended by appropriate authorities,
retirement shall be compulsory for an employee of sixty-five (65) "(4) brain injury resulting in incurable imbecility or insanity; and
years of age with at least fifteen (15) years of
service: Provided, That if he has less than fifteen (15) years of "(5) such other cases as may be determined by the GSIS.
service, he may be allowed to continue in the service in
accordance with existing civil service rules and regulations. "SEC. 17. Permanent Partial Disability Benefits. - (a) If the
"SEC. 13-A. Conditions for Entitlement. - A member who retires disability is partial, he shall receive a cash payment in accordance
from the service shall be entitled to the retirement benefits with a schedule of disabilities to be prescribed by the
enumerated in paragraph (a) of Section 13 hereof: Provided, That: GSIS: Provided, That he satisfies either conditions (1) or (2) of
(1) he has rendered at least fifteen years of service; Section 16 (a);
(2) he is at least sixty (60) years of age at the time of retirement; "(b) The following disabilities shall be deemed permanent
and partial:
(3) he is not receiving a monthly pension benefit from permanent "(1) complete and permanent loss of the use of:
total disability. (i) any finger
"SEC. 14. Periodic Pension Adjustment. - The monthly pension of (ii) any toe
all pensioners including all those receiving survivorship pension (iii) one arm
benefits shall be periodically adjusted as may be recommended (iv) one hand
by the GSIS actuary and approved by the Board in accordance (v) one foot
with the rules and regulations prescribed by the GSIS. (vi) one leg
(vii) one or both ears
"PERMANENT DISABILITY BENEFITS (viii) hearing of one or both ears
"SEC. 15. General Conditions for Entitlement. - A member who (ix) sight of both eyes
suffers permanent disability for reasons not due to his grave
misconduct, notorious negligence, habitual intoxication, or willful "(2) such other cases as my be determined by the GSIS.
intention to kill himself or another, shall be entitled to the
benefits provided for under Sections 16 and 17 immediately
following, subject to the corresponding conditions thereof.
"SEC. 16. Permanent Total Disability Benefits. - (a) If the "TEMPORARY DISABILITY BENEFITS
permanent disability is total, he shall receive a monthly income "SEC. 18. Temporary Total Disability Benefits. - (a) A member who
benefit for life equal to the basic monthly pension effective from suffers temporary total disability for reasons not due to any of the
the date of disability: Provided, That: conditions enumerated in Section 15 hereof shall be entitled to
(1) he is in the service at the time of disability; or seventy-five percent (75%) of his current daily compensation for
(2) if separated from the service, he has paid at least thirty-six each day or fraction thereof of temporary disability benefit not
(36) monthly contributions within the five (5) year period exceeding one hundred twenty (120) days in one calendar year
immediately preceding disability, or has paid a total of at least after exhausting all his sick leave credits and collective bargaining
one hundred eighty (180) monthly contributions, prior to his agreement sick leave benefits, if any, but not earlier than the
disability: Provided, further, That if at the time of disability, he was fourth day of his temporary total disability: Provided, That:
in the service and has paid a total of at least one hundred eighty "(1) he is in the service at the time of his disability; or
(180) monthly contributions, in addition to the monthly income "(2) if separated, he has rendered at least three (3) years of
benefit, he shall receive a cash payment equivalent to eighteen service and has paid at least six (6) monthly contributions in the
(18) times his basic monthly pension: Provided, finally, That a twelve-month period immediately preceding his disability.
member cannot enjoy the monthly income benefit for permanent "Provided, however, That a member cannot enjoy the temporary
disability and the old-age retirement simultaneously. total disability benefit and sick leave pay
"(b) If a member who suffers permanent total disability does not simultaneously:Provided, further, That if the disability requires
satisfy conditions (1) and (2) in paragraph (a) of this section but more extensive treatment that lasts beyond one hundred twenty
has rendered at least three (3) years of service at the time of his (120) days, the payment of the temporary total disability benefit
disability, he shall be advanced the cash payment equivalent to may be extended by the GSIS but not to exceed a total of two
one hundred percent (100%) of his average monthly hundred forty (240) days.
compensation for each year of service he paid contributions, but "(b) The temporary total disability benefit shall in no case be less
not less than Twelve thousand pesos (P12,000.00) which should than Seventy pesos (P70.00) a day.
have been his separation benefit. "(c) The notices required of the member and the employer, the
"(c) Unless the member has reached the minimum retirement mode of payment, and the other requirements for entitlement to
age, disability benefit shall be suspended when: temporary total disability benefits shall be provided in the rules
"(1) he is reemployed; or and regulations to be prescribed by the GSIS.
"SEC. 19. Non-scheduled Disability. - For injuries or illnesses
"(2) he recovers from his disability as determined by the GSIS, resulting in a disability not listed in the schedule of partial/total
whose decision shall be final and binding; or disability provided herein, the GSIS shall determined the nature
of the disability and the corresponding benefits therefor.
"(3) he fails to present himself for medical examination when
required by the GSIS.
"SURVIVORSHIP BENEFITS
"SEC. 20. Survivorship Benefits. - When a member or pensioner
dies, the beneficiaries shall be entitled to survivorship benefits
provided in Sections 21 and 22 hereunder subject to the
conditions therein provided for. The survivorship pension shall
consist of:
(1) the basic survivorship pension which is fifty percent (50%) of
the basic monthly pension; and
(2) the dependent childrens pension not exceeding fifty percent
(50%) of the basic monthly pension
. shall be paid upon the death of:
"SEC. 21. Death of a Member. - (a) Upon the death of a member,
the primary beneficiaries shall be entitled to:
(1) survivorship pension: Provided, That the deceased:
(i) was in the service at the time of his death; or
(ii) if separated from the service, has at least three (3) years of
service at the time of his death and has paid thirty-six (36)
monthly contributions within the five-year period immediately
preceding his death; or has paid a total of at least one hundred
eighty (180) monthly contributions prior to his death; or
(2) the survivorship pension plus a cash payment equivalent to
one hundred percent (100%) of his average monthly
compensation for every year of service: Provided, That the
deceased was in the service at the time of his death with at least
three (3) years of service; or
(3) a cash payment equivalent to one hundred percent (100%) of
his average monthly compensation for each year of service he
paid contributions, but not less than Twelve thousand pesos
(P12,000.00): Provided, That the deceased has rendered at least
three (3) years of service prior to his death but does not qualify
for the benefits under item (1) or (2) of this paragraph.
(b) The survivorship pension shall be paid as follows:
(1) when the dependent spouse is the only survivor, he/she shall
receive the basic survivorship pension for life or until he/she
remarries;
(2) when only dependent children are the survivors, they shall be
entitled to the basic survivorship pension for as long as they are
qualified, plus the dependent childrens pension equivalent to ten
percent (10%) of the basic monthly pension for every dependent
child not exceeding five (5), counted from the youngest and
without substitution;
(3) when the survivors are the dependent spouse and the
dependent children, the dependent spouse shall receive the basic
survivorship pension for life or until he/she remarries, and the
dependent children shall receive the dependent childrens
pension mentioned in the immediately preceding paragraph (2)
hereof.
(c) In the absence of primary beneficiaries, the secondary
beneficiaries shall be entitled to:
(1) the cash payment equivalent to one hundred percent (100%)
of his average monthly compensation for each year of service he
paid contributions, but not less than Twelve thousand pesos
(P12,000.00): Provided, That the member is in the service at the
time of his death and has at least three (3) years of service; or
(2) in the absence of secondary beneficiaries, the benefits under
this paragraph shall be paid to his legal heirs.
(d) For purposes of the survivorship benefits, legitimate children
shall include legally adopted and legitimated children.
"SEC. 22. Death of a Pensioner. - Upon the death of an old-age
pensioner or a member receiving the monthly income benefit for
permanent disability, the qualified beneficiaries shall be entitled
to the survivorship pension defined in Section 20 of this Act,
subject to the provisions of paragraph (b) of Section 21 hereof.
When the pensioner dies within the period covered by the lump
sum, the survivorship pension shall be paid only after the
expiration of the said period.
"FUNERAL BENEFITS
"SEC. 23. Funeral Benefits. - The amount of the funeral benefits
shall be determined and specified by the GSIS in the rules and
regulations but shall not be less than Twelve thousand pesos
(P12,000.00): Provided, That it shall be increased to at least
Eighteen thousand pesos (P18,000.00) after five (5) years and
(a) an active member as defined under Section 2 (e) of this Act;
or
(b) a member who has been separated from the service, but who
may be entitled to future benefit pursuant to Section 4 of this Act;
or
(c) a pensioner, as defined in Section 2 (o) of this Act; or
(d) a retiree who at the time of his retirement was of pensionable
age under this Act but who opted to retire under Republic Act No.
1616.
"LIFE INSURANCE BENEFITS
"SEC. 24. Compulsory Life Insurance. - All employees except for
Members of the Armed Forces of the Philippines (AFP) and the
Philippine National Police (PNP) shall, under such terms and
conditions as may be promulgated by the GSIS, be compulsorily
covered with life insurance, which shall automatically take effect
as follows:
(1) for those employed after the effectivity of this Act, their
insurance shall take effect on the date of their employment;
(2) for those whose insurance will mature after the effectivity of
this Act, their insurance shall be deemed renewed on the day
following the maturity or expiry date of their insurance;
(3) for those without any life insurance as of the effectivity of this
Act, their insurance shall take effect following said effectivity.
"SEC. 25. Dividends. - An annual dividend may be granted to all
members of the GSIS whose life insurance is in force for at least
one (1) year in accordance with a dividends allocation formula to
be determined by the GSIS.
"SEC. 26. Optional Insurance. - Subject to the rules and regulations
prescribed by the GSIS, a member may apply for insurance
and/or pre-need coverage embracing life, health, hospitalization,
education, memorial plans, and such other plans as may be
designed by the GSIS, for himself and/or his dependents. Any
employer may likewise apply for group insurance coverage for its
employees. The payment of the premiums/installments for
optional insurance and pre-need products may be made by the
insured or his employer and/or any person acceptable to the
GSIS.
"SEC. 27. Reinsurance. - The GSIS may reinsure any of its interests
or part thereof with any private company or reinsurer whether
domestic of foreign: Provided, That the GSIS shall submit an
annual report on its reinsurance operations to the Insurance
Commission.
"E. ADJUDICATION OF CLAIMS AND DISPUTES
"SEC. 28. Prescription. - Claims for benefits under this Act except
for life and retirement shall prescribe after four (4) years from
the date of contingency.
"SEC. 29. Facility of Payment. - The GSIS shall prescribe rules and
regulations to facilitate payment of benefits, proceeds, and claims
under this Act and any other laws administered by the GSIS.
Payments made by the GSIS prior to its receipt of an adverse
claim, to a beneficiary or claimant subsequently found not
entitled thereto, shall not bar the legal and eligible recipient to his
right to demand the payment of benefits, proceeds, and claims
from the GSIS, who shall, however, have a right to institute the
appropriate action in a court of law against the ineligible
recipient.
"SEC. 30. Settlement of Disputes. - The GSIS shall have original and
exclusive jurisdiction to settle any disputes arising under this Act
and any other laws administered by the GSIS.
The Board may designate any member of the Board, or official of
the GSIS who is a lawyer, to act as hearing officer to receive
evidence, make findings of fact and submit recommendations,
together with all documentary and testimonial evidence to the
Board within thirty (30) working days from the time the parties
have closed their respective evidence and filed their last pleading.
The Board shall decide the case within thirty (30) days from the
receipt of the hearing officers findings and recommendations.
The cases heard directly by the Board shall be decided within
thirty (30) working days from the time they are submitted by the
parties for decision.
"SEC. 31. Appeals. - Appeals from any decision or award of the
Board shall be governed by Rules 43 and 45 of the 1997 Rules of
Civil Procedure adopted by the Supreme Court on April 8, 1997
which will take effect on July 1, 1997: Provided, That pending
cases and those filed prior to July 1, 1997 shall be governed by
the applicable rules of procedure: Provided, further,That the
appeal shall take precedence over all other cases except criminal
cases when the penalty of life imprisonment or death or reclusion
perpetua is imposable.
The appeal shall not stay the execution of the order or award
unless ordered by the Board, by the Court of Appeals or by the
Supreme Court and the appeal shall be without prejudice to the
special civil action of certiorari when proper.
"SEC. 32. Execution of Decision. - When no appeal is perfected and
there is no order to stay by the Board, by the Court of Appeals or
by the Supreme Court, any decision or award of the Board shall
be enforced and executed in the same manner as decisions of the
Regional Trial Court. For this purpose, the Board shall have the
power to issue to the city or provincial sheriff or its appointed
sheriff such writs of execution as may be necessary for the
enforcement of such decision or award, and any person who shall
fail or refuse to comply with such decision, award, writ or process
after being required to do so shall, upon application by the GSIS,
be punished for contempt.
"SEC. 33. Oaths, Witnesses, and Production of Records. - When
authorized by the Board, an official or employee of the GSIS shall
have the power to administer oath and affirmation, take
deposition, certify to official acts, and issue subpoena ad
testificandum and subpoena duces tecum to compel the
attendance of witnesses and the production of books, papers,
correspondences, and other records deemed necessary as
evidence in connection with any question arising under this Act.
Any case of contumacy shall be dealt with in accordance with the
provisions of Section 580 of the Revised Administrative Code.
"F. FUNDS OF THE GSIS
"SEC. 34. Funds. - All contributions payable under Section 5 of this
Act together with the earnings and accruals thereon shall
constitute the GSIS Social Insurance Fund. The said fund shall be
used to finance the benefits administered by the GSIS under this
Act. In addition, the GSIS shall administer the optional insurance
fund for the insurance coverage described in Section 26 hereof,
the Employees Compensation Insurance Fund created under P.D.
626, as amended, General Insurance Fund created under Act No.
656, as amended, and such other special funds existing or that
may be created for special groups or persons rendering services
to the government. The GSIS shall maintain the required reserves
to guarantee the fulfillment of its obligations under this Act.
The funds of the GSIS shall not be used for purposes other than
what are provided for under this Act. Moreover, no portion of the
funds of the GSIS or income thereof shall accrue to the General
Fund of the national government and its political subdivisions,
instrumentalities and other agencies including government-
owned and controlled corporations except as may be allowed
under this Act.
"SEC. 35. Deposits and Disbursements. - All revenues collected and
all accruals thereto shall be deposited, administered and
disbursed in accordance with the law. A maximum expense
loading of twelve percent (12%) of the yearly revenues from all
sources may be disbursed for administrative and operational
expenses except as may be otherwise approved by the President
of the Philippines on the basis of actuarial and management
studies.
"SEC. 36. Investment of Funds. - The funds of the GSIS which are
not needed to meet the current obligations may be invested
under such terms and conditions and rules and regulations as
may be prescribed by the Board: Provided, That investments shall
satisfy the requirements of liquidity, safety/security and yield in
order to ensure the actuarial solvency of the funds of the
GSIS: Provided, further, That the GSIS shall submit an annual
report on all investments made to both Houses of Congress of the
Philippines, to wit:
(a) in interest-bearing bonds or securities or other evidence of
indebtedness of the Government of the Philippines;
(b) in interest-bearing deposits or securities in any domestic
bank doing business in the Philippines: Provided, That in the case
of such deposits, there shall not exceed at any time the
unimpaired capital and surplus or total private deposits of the
depository bank, whichever is smaller: Provided, further, That the
said bank has prior designation as a depository for the purpose
by the Monetary Board of the Central Monetary Authority;
(c) in direct housing loans to members and group housing
projects secured by first mortgage, giving priority to the low
income groups and in short and medium term loans to members
such as salary, policy, educational, emergency stock purchase plan
and other similar loans: Provided, That no less than forty percent
(40%) of the investible fund of the GSIS Social Insurance Fund
shall be invested for these purposes;
(d) in bonds, securities, promissory notes or other evidence of
indebtedness of educational or medical institutions to finance the
construction, improvement and maintenance of schools and
hospitals;
(e) in real estate property including shares of stocks involving
real state property and investments secured by first mortgages
on real estate or other collaterals acceptable to the
GSIS: Provided, That such investment shall, in the determination
of the Board, redound to the benefit of the GSIS, its members as
well as the general public;
(f) in debt instruments and other securities traded in the
secondary markets;
(g) in loans to, or in bonds, debentures, promissory notes or
other evidence of indebtedness of any solvent corporation
created or existing under the laws of the Philippines;
(h) in common and preferred stocks of any solvent corporation or
financial institution created or existing under the laws of the
Philippines listed in the stock exchange with proven track record
of profitability over the last three (3) years and payment of
dividends at least once over the same period;
(i) in domestic mutual funds including investments related to the
operations of mutual funds; and
(j) in foreign mutual funds and in foreign currency deposits or
foreign currency-denominated debts, non-speculative equities purposes of this Act, as well as the effective exercise of the
and other financial instruments or other assets issued in powers and functions, and the discharge of duties and
accordance with existing laws of the countries where such responsibilities of the GSIS, its officers and employees;
financial instruments are issued: Provided, That these
instruments or assets are listed in bourses of the respective (b) to adopt or approve the annual and supplemental budget of
countries where these instruments or assets are issued: Provided, receipts and expenditures including salaries and allowances of
further, That the issuing company has proven track record of the GSIS personnel; to authorize such capital and operating
profitability over the last three (3) years and payment of expenditures and disbursements of the GSIS as may be necessary
dividends at least once over the same period. and proper for the effective management and operation of the
"SEC. 37. Records and Reports. - The GSIS shall keep and cause to GSIS;
keep such records as may be necessary for the purpose of making
actuarial studies, calculations and valuations of the funds of the (c) to invest the funds of the GSIS, directly or indirectly, in
GSIS including such data needed in the computation of rates of accordance with the provisions of this Act;
disability, mortality, morbidity, separation and retirement among
the members and any other information useful for the adjustment (d) to acquire, utilize or dispose of, in any manner recognized by
of the benefits of the members. The GSIS shall maintain law, real or personal property in the Philippines or elsewhere
appropriate books of accounts to record its assets, liabilities, necessary to carry out the purposes of this Act;
income, expenses, receipts and disbursement of funds and other
financial transactions and operations. (e) to conduct continuing actuarial and statistical studies and
"SEC. 38. Examination and Valuation of the Funds. - The GSIS shall valuations to determine the financial condition of the GSIS and
make a periodic actuarial examination and valuation of its funds taking into consideration such studies and valuations and the
in accordance with accepted actuarial principles. limitations herein provided, re-adjust the benefits, contributions,
"SEC. 39. Exemption from Tax, Legal Process and Lien. - It is hereby premium rates, interest rates or the allocation or re-allocation of
declared to be the policy of the State that the actuarial solvency of the funds to the contingencies covered;
the funds of the GSIS shall be preserved and maintained at all
times and that contribution rates necessary to sustain the (f) to have the power of succession;
benefits under this Act shall be kept as low as possible in order
not to burden the members of the GSIS and their employers. (g) to sue and be sued;
Taxes imposed on the GSIS tend to impair the actuarial solvency
of its funds and increase the contribution rate necessary to (h) to enter into, make, perform and carry out contracts of every
sustain the benefits of this Act. Accordingly, notwithstanding any kind and description with any person, firm or association or
laws to the contrary, the GSIS, its assets, revenues including all corporation, domestic or foreign;
accruals thereto, and benefits paid, shall be exempt from all taxes,
assessments, fees, charges, or duties of all kinds. These (i) to carry on any other lawful business whatsoever in pursuance
exemptions shall continue unless expressly and specifically of, or in connection with the provisions of this Act;
revoked and any assessment against the GSIS as of the approval of
this Act are hereby considered paid. Consequently, all laws, (j) to have one or more offices in and outside of the Philippines,
ordinances, regulations, issuances, opinions or jurisprudence and to conduct its business and exercise its powers throughout
contrary to or in derogation of this provision are hereby deemed and in any part of the Republic of the Philippines and/or in any or
repealed, superseded and rendered ineffective and without legal all foreign countries, states and territories:Provided, That the GSIS
force and effect. shall maintain a branch office in every province where there
"Moreover, these exemptions shall not be affected by subsequent exists a minimum of fifteen thousand (15,000) membership;
laws to the contrary unless this section is expressly, specifically
and categorically revoked or repealed by law and a provision is (k) to borrow funds from any source, private or government,
enacted to substitute or replace the exemption referred to herein foreign or domestic, only as an incident in the securitization of
as an essential factor to maintain or protect the solvency of the housing mortgages of the GSIS and on account of its receivables
fund, notwithstanding and independently of the guaranty of the from any government or private entity;
national government to secure such solvency or liability.
"The funds and/or the properties referred to herein as well as the (l) to invest, own or otherwise participate in equity in any
benefits, sums or monies corresponding to the benefits under this establishment, firm or entity;
Act shall be exempt from attachment, garnishment, execution,
levy or other processes issued by the courts, quasi-judicial (m) to approve appointments in the GSIS except appointments to
agencies or administrative bodies including Commission on Audit positions which are policy determining, primarily confidential or
(COA) disallowances and from all financial obligations of the highly technical in nature according to the Civil Service rules and
members, including his pecuniary accountability arising from or regulations: Provided, That all positions in the GSIS shall be
caused or occasioned by his exercise or performance of his governed by the compensation and position classification system
official functions or duties, or incurred relative to or in and qualifications standards approved by the GSIS Board of
connection with his position or work except when his monetary Trustees based on a comprehensive job analysis and audit of
liability, contractual or otherwise, is in favor of the GSIS. actual duties and responsibilities:Provided, further, That the
compensation plan shall be comparable with the prevailing
"G. ADMINISTRATION compensation plans in the private sector and shall be subject to
"SEC. 40. Implementing Body. - The Government Service Insurance the periodic review by the Board no more than once every four
System as created under Commonwealth Act No. 186 shall (4) years without prejudice to yearly merit reviews or increases
implement the provisions of this Act. based on productivity and profitability;
"SEC. 41. Powers and Functions of the GSIS. - The GSIS shall
exercise the following powers and functions: (n) to design and adopt an Early Retirement Incentives Plan
(a) to formulate, adopt, amend and/or rescind such rules and (ERIP) and/or financial assistance for the purpose of retirement
regulations as may be necessary to carry out the provisions and for its own personnel;

(o) to fix and periodically review and adjust the rates of interest
and other terms and conditions for loans and credits extended to
members or other persons, whether natural or juridical;
(p) to enter into agreement with the Social Security System or
any other entity, enterprise, corporation or partnership for the
benefit of members transferring from one system to another
subject to the provisions of Republic Act No. 7699, otherwise
known as the Portability Law;
(q) to be able to float proper instrument to liquefy long-term
maturity by pooling funds for short-term secondary market;
(r) to submit annually, not later than June 30, a public report to
the President of the Philippines and the
Congress of the Philippines regarding its activities in the
administration and enforcement of this Act during the preceding
year including information and recommendations on board
policies for the development and perfection of the programs of
the GSIS;
(s) to maintain a provident fund, which consists of contributions
made by both the GSIS and its officials and employees and their
earnings, for the payments of benefits to such officials and
employees or their heirs under such terms and conditions as it
may prescribe;
(t) to approve and adopt guidelines affecting investments,
insurance coverage of government properties, settlement of
claims, disposition of acquired assets, privatization or expansion
of subsidiaries, development of housing projects, increased
benefit and loan packages to members, and the enforcement of
the provision of this Act;
(u) any provision of law to the contrary notwithstanding, to
authorize the payment of extra remuneration to the officials and
employees directly involved in the collection and/or remittances
of contributions, loan repayments, and other monies due to the
GSIS at such rates and under such conditions as it may
adopt: Provided, That the best interest of the GSIS shall be
observed thereby;
(v) to determine, fix and impose interest upon unpaid premiums
due from employers and employees;
(w) to ensure the collection or recovery of all indebtedness,
liabilities and/or accountabilities, including unpaid premiums or
contributions in favor of the GSIS arising from any cause or
source whatsoever, due from obligors, whether public or private.
The Board shall demand payment or settlement of the obligations
referred to herein within thirty (30) days from the date the
obligation becomes due, and in the event of failure or refusal of
the obligor or debtor to comply with the demand, to initiate or
institute the necessary or proper actions or suits, criminal, civil or
administrative or otherwise, before the courts, tribunals,
commissions, boards, or bodies of proper jurisdiction within
thirty (30) days reckoned from the expiry date of the period fixed
in the demand within which to pay or settle the account;
(x) to design and implement programs that will promote and
mobilize savings and provide additional resources for social
security expansion and at the same time afford individual
members appropriate returns on their savings/investments. The
programs shall be so designed as to spur socio-economic take-off
and maintain continued growth; and
(y) to exercise such powers and perform such other acts as may
be necessary, useful, incidental or auxiliary to carry out the
provisions of this Act, or to attain the purposes and objectives of
this Act.
"SEC. 42. The Board of Trustees; its Composition; Tenure and
Compensation. - The corporate powers and functions of the GSIS
shall be vested in and exercised by the Board of Trustees
composed of the President and General Manager of the GSIS and
eight (8) other members to be appointed by the President of the
Philippines, one (1) of whom shall be either the President of the
Philippine Public School Teachers Association (PPSTA) or the
President of the Philippine Association of School Superintendents
(PASS), another two (2) shall represent the leading organizations
or associations of government employees/retirees, another four
(4) from the banking, finance, investment, and insurance sectors,
and one (1) recognized member of the legal profession who at the
time of appointment is also a member of the GSIS. The Trustees
shall elect from among themselves a Chairman while the
President and General Manager of the GSIS shall automatically be
the vice-chairman.
The Trustees, except the President and General Manager who
shall cease as trustee upon his separation, shall hold office for six
(6) years without reappointment, or until their successors are
duly appointed and qualified. Vacancy, other than through the
expiration of the term, shall be filled for the unexpired term only.
The members of the Board shall be entitled to a per diem of Two
thousand five hundred pesos (P2,500.00) for each board meeting
actually attended by them, but not to exceed Ten thousand pesos
(P10,000.00) a month and reasonable transportation and
representation allowances as may be fixed by the Board.
"SEC. 43. Powers and Functions of the Board of Trustees. - The
Board of Trustees shall have the following powers and functions:
"(a) to formulate the policies, guidelines and programs to
effectively carry out the purposes of this Act;
"(b) to promulgate such rules and regulations as may be
necessary or proper for the effective exercise of the powers and
functions as well as the discharge of the duties and
responsibilities of the GSIS, its officers and employees;
"(c) upon the recommendation of the President and General
Manager, to approve the annual and supplemental budget of
receipts and expenditures of the GSIS, and to authorize such
operating and capital expenditures and disbursements of the
GSIS as may be necessary or proper for the effective management,
operation and administration of the GSIS;
"(d) upon the recommendation of the President and General
Manager, to approve the GSIS organizational and administrative
structure and staffing pattern, and to establish, fix, review, revise
and adjust the appropriate compensation packages for the
officers and employees of the GSIS and reasonable allowances,
incentives, bonuses, privileges and other benefits as may be
necessary or proper for the effective management, operation and
administration of the GSIS, which shall be exempt from Republic
Act No. 6758, otherwise known as the Attrition Law;
"(e) to fix and periodically review and adjust the rates of interest
and other terms and conditions for loans and credits extended to
its members or other persons, whether natural or juridical;
"(f) the provision of any law to the contrary notwithstanding, to
compromise or release, in whole or in part, any claim or settle
liability to the GSIS, regardless of the amount involved, under
such terms and conditions as it may impose for the best interest
of the GSIS;
"(g) to approve and adopt guidelines affecting investments,
insurance coverage of government properties, settlement of
claims, disposition of acquired assets, development of housing
projects, increased benefit and loan packages to members, and
the enforcement of the provisions of this Act;
"(h) to determine, fix, and impose interest upon unpaid or
unremitted premiums and/or contributions; and
"(i) to do and perform any and all acts necessary, proper or
incidental to the attainment of the purposes and objectives of this
Act.
"SEC. 44. Appointment, Qualifications, and Compensation of the
President and General Manager and of other Personnel. -The
President and General Manager of the GSIS shall be its Chief
Executive Officer and shall be appointed by the President of the
Philippines. He shall be a person with management and
investments expertise necessary for the effective performance of
his duties and functions under this Act.
"The GSIS President and General Manager shall be assisted by one
or more executive vice-presidents, senior vice-presidents and
managers in addition to the usual supervisory and rank-and-file
positions who shall be appointed and removed by the President
and General Manager with the approval of the Board, in
accordance with the existing Civil Service rules and regulations.
"SEC. 45. Powers and Duties of the President and General Manager.
- The President and General Manager of the GSIS shall, among
others, execute and administer the policies and resolutions
approved by the Board and direct and supervise the
administration and operations of the GSIS. The President and
General Manager, subject to the approval of the Board, shall
appoint the personnel of the GSIS, remove, suspend or otherwise
discipline them for cause, in accordance with the existing Civil
Service rules and regulations, and prescribe their duties and
qualifications to the end that only competent persons may be
employed.
"SEC. 46. Auditor. - (a) The Chairman of the Commission on Audit
shall be the ex officio auditor of the GSIS, and the necessary
personnel to assist said representative in the performance of his
duties.
"(b) The Chairman of the Commission on Audit or his authorized
representatives, shall submit to the Board soon after the close of
each calendar year, an audited statement showing the financial
condition and progress of the GSIS for the calendar year just
ended.
"SEC. 47. Legal Counsel. - The Government Corporate Counsel
shall be the legal adviser and consultant of the GSIS, but the GSIS
may assign to the Office of the Government Corporate Counsel
(OGCC) cases for legal action or trial, issues for legal opinions,
preparation and review of contracts/agreements and others, as
the GSIS may decide or determine from time to time:Provided,
however, That the present legal services group in the GSIS shall
serve as its in-house legal counsel.
"The GSIS may, subject to approval by the proper court, deputize
any personnel of the legal service group to act as special sheriff in
the enforcement of writs and processes issued by the court,
quasi-judicial agencies or administrative bodies in cases involving
the GSIS.
"SEC. 48. Powers of the Insurance Commission. - The Insurance
Commissioner or his authorized representatives shall make an
examination of financial condition and methods of transacting
business of the GSIS at least once every three (3) years and the
report of said examination shall be submitted to the Board of
Trustees and copies thereof be furnished the Office of the
President of the Philippines and the two houses of the Congress
of the Philippines within five (5) days after the close of
examination: Provided, however, That for each examination, the
GSIS shall pay the office of the Insurance Commissioner an
amount equal to the actual expenses incurred by the said office in
the conduct of examination, including the salaries of the
examiners and of the actuary of such examination for the actual
time spent.
"H. GENERAL PROVISION
"SEC. 49. Dispensation of Social Insurance Benefits. - (a) The GSIS
shall pay the retirement benefits to the employee on his last day
of service in the government: Provided, That all requirements are
submitted to the GSIS within a reasonable period prior to the
effective date of the retirement;
"(b) The GSIS shall discontinue the processing and adjudication
of retirement claims under R.A. No. 1616 except refund of
retirement premium under R. A. No. 910. Instead, all agencies
concerned shall process and pay the gratuities of their employees.
The Board shall adopt the proper rules and procedures for the
implementation of this provision.
"SEC. 50. Development and Disposition of Acquired Assets. - The
GSIS shall have the right to develop and dispose of its acquired
assets obtained in the ordinary course of its business. To add
value to, improve profitability on, and/or enhance the
marketability of an acquired asset, the GSIS may further
develop/renovate the same either with its own capital or through
a joint venture arrangement with private companies or
individuals.
"The GSIS may sell its acquired assets in accordance with existing
Commission on Audit (COA) rules and regulations for an amount
not lower than the current market value of the property. For this
purpose, the GSIS shall conduct an annual appraisal of its
property or acquired assets to determine its current market
value. All notices of sale shall be published in newspapers of
general circulation.
"No injunction or restraining order issued by any court,
commission, tribunal or office shall bar, impede or delay the sale
and disposition by the GSIS of its acquired assets except on
questions of ownership and national or public interest.
"SEC. 51. Government Assistance to the GSIS. - The GSIS may call
upon any employer for such assistance as may be necessary in the
discharge of its duties and functions.
"I. PENAL PROVISIONS
"SEC. 52. Penalty. - (a) Any person found to have participated
directly or indirectly in the commission of fraud, collusion,
falsification, or misrepresentation in any transaction with the
GSIS, whether for him or for some other persons, shall suffer the
penalties provided for in Article 172 of the Revised Penal Code.
"(b) Whoever shall obtain or receive any money or check
invoking any provision of this Act or any agreement thereunder,
without being entitled thereto with the intent to defraud any
member, any employer, the GSIS, or any third party, shall be
punished by a fine of not less than Five thousand pesos
(P5,000.00) nor more than Twenty thousand pesos (P20,000.00)
or by imprisonment of not less than six (6) years and one (1) day
to twelve (12) years, or both, at the discretion of the court.
"(c) Whoever fails or refuses to comply with the provisions of this
Act or with the rules and regulations adopted by the GSIS, shall be
punished by a fine of not less than Five thousand pesos
(P5,000.00) nor more than Twenty thousand pesos (P20,000.00)
or imprisonment of not less than six (6) years and one (1) day to
twelve (12) years, or both, at the discretion of the court.
"(d) The treasurer, finance officer, cashier, disbursing officer,
budget officer or other official or employee who fails to include in
the annual budget the amount corresponding to the employer
and employee contributions, or who fails or refuses or delays by
more than thirty (30) days from the time such amount becomes
due and demandable, or to deduct the monthly contributions of
the employee shall, upon conviction by final judgment, suffer the
penalties of imprisonment from six (6) months and one (1) day to
six (6) years, and a fine of not less than Three thousand pesos
(P3,000.00) but not more than Six thousand pesos (P6,000.00),
and in addition, shall suffer absolute perpetual disqualification construed to repeal, amend or limit any provision of existing
from holding public office and from practicing any profession or laws, Presidential Decrees and Letters of Instructions, not
calling licensed by the government. otherwise specifically inconsistent with the provisions of this Act.
"(e) Any employee or member who receives or keeps fund or "SEC. 55. Exclusiveness of Benefits. - Whenever other laws provide
property belonging, payable or deliverable to the GSIS and similar benefits for the same contingencies covered by this Act,
appropriates the same, or takes or misappropriates or uses the the member who qualifies to the benefits shall have the option to
same for any purpose other than authorized by this Act, or choose which benefits will be paid to him. However, if the benefits
permits another person to take, misappropriate or use said fund provided by the law chosen are less than the benefits provided
or property by expressly consenting thereto, or through under this Act, the GSIS shall pay only the difference.
abandonment or negligence, or is otherwise guilty of the "SEC. 56. Appropriations. - The amount necessary to carry out the
misappropriation of said fund or property, in whole or in part, provisions of this Act shall be included in the respective budgets
shall suffer the penalties provided in Article 217 of the Revised of the agencies in the national government obligation program of
Penal Code, and in addition, shall suffer absolute perpetual the year following its enactment into law and thereafter."
disqualification from holding public office and from practicing SEC. 2. Separability Clause. - Should any provision of this Act or
any profession or calling licensed by the government. any part thereof be declared invalid, the other provisions, so far
"(f) Any employee who, after deducting the monthly contribution as they are separable from the invalid ones, shall remain in force
or loan amortization from a members compensation, fails to and effect.
remit the same to the GSIS within thirty (30) days from the date SEC. 3. Repealing Clause. - All laws and any other law or parts of
they should have been remitted under Section 6(a), shall be law specifically inconsistent herewith are hereby repealed or
presumed to have misappropriated such contribution or loan modified accordingly: Provided, That the rights under the existing
amortization and shall suffer the penalties provided in Article laws, rules and regulations vested upon or acquired by an
315 of the Revised Penal Code, and in addition, shall suffer employee who is already in the service as of the effectivity of this
absolute perpetual disqualification from holding public office and Act shall remain in force and effect: Provided, further, That
from practicing any profession or calling licensed by the subsequent to the effectivity of this Act, a new employee or an
government. employee who has previously retired or separated and is
"(g) The heads of the offices of the national government, its reemployed in the service shall be covered by the provisions of
political subdivisions, branches, agencies and instrumentalities, this Act.
including government-owned or controlled corporations and SEC. 4. Effectivity. - This Act shall take effect fifteen (15) days after
government financial institutions, and the personnel of such its publication in the Official Gazette or in at least two (2)
offices who are involved in the collection of premium newspapers of general circulation.
contributions, loan amortization and other accounts due the GSIS This Act, which is a consolidation of Senate Bill No. 2013 and
who shall fail, refuse or delay the payment, turnover, remittance House Bill No. 8561, was finally passed by the Senate and the
or delivery of such accounts to the GSIS within thirty (30) days House of Representatives on May 29, 1997 and May 28, 1997,
from the time that the same shall have been due and demandable respectively.
shall, upon conviction by final judgment, suffer the penalties of Approved: May 30, 1997
imprisonment of not less than one (1) year nor more than five (5)
years and a fine of not less than Ten thousand pesos (P10,000.00) (Sgd.) FIDEL V. RAMOS
nor more than Twenty thousand pesos (P20,000.00), and in President of the Philippines
addition, shall suffer absolute perpetual disqualification from
holding public office and from practicing any profession or calling
licensed by the government.
"(h) The officers and/or personnel referred to in paragraph (g) of
this section shall be liable not only criminally but also civilly to
the GSIS or to the employee or member concerned in the form of
damages, including surcharges and interests.
"(i) For the charges or complaints referred to in paragraph (g) of
this section, the liabilities therein set forth shall be construed as
waiver of the State of its immunity from suit, hence, the above-
mentioned officials and/or personnel may not invoke the defense
of non-suability of the State.
"(j) Failure of the Members of the GSIS Board, including the
chairman and the vice-chairman, to comply with the provisions of
paragraph (w) of Section 41 hereof, shall subject them to
imprisonment of not less than six (6) months nor more than one
(1) year or a fine of not less than Five thousand pesos (P5,000.00)
nor more than Ten thousand pesos (P10,000.00) without
prejudice to any civil or administrative liability which may also
arise therefrom.
"(k) Criminal actions arising from violations of the provisions of
this Act may be commenced by the GSIS or by the aggrieved
member, either under this Act or, in appropriate cases, under the
Revised Penal Code.
"SEC. 53. Implementing Rules and Regulations. - The implementing
rules and regulations to carry out the provisions of this Act shall
be adopted and promulgated by the GSIS not later than ninety
(90) days after the approval of this Act.
"SEC. 54. Non-impairment of Benefits, Powers, Jurisdiction, Rights,
Privileges, Functions and Activities. - Nothing in this Act shall be
SOCIAL SECURITY ACT OF 1997
REPUBLIC ACT NO. 8282
AN ACT FURTHER STRENGTHENING THE SOCIAL SECURITY
SYSTEM THEREBY AMENDING FOR THIS PURPOSE, REPUBLIC
ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE
SOCIAL SECURITY LAW.
SECTION 1. Republic Act No. 1161, as amended, otherwise known
as the "Social Security Law", is hereby further amended to read as
follows:
"SECTION 1. Short Title. - This Act shall be known as the "Social
Security Act of 1997."
"SEC. 2. Declaration of Policy. - It is the policy of the Republic of
the Philippines to establish, develop, promote and perfect a
sound and viable tax-exempt social security service suitable to
the needs of the people throughout the Philippines which shall
promote social justice and provide meaningful protection to
members and their beneficiaries against the hazards of disability,
sickness, maternity, old age, death, and other contingencies
resulting in loss of income or financial burden. Towards this end,
the State shall endeavor to extend social security protection to
workers and their beneficiaries.
"SEC. 3. Social Security System. - (a) To carry out the purposes of
this Act, the Social Security System, hereinafter referred to
as SSS, a corporate body, with principal place of business in
Metro Manila, Philippines is hereby created. The SSS shall be
directed and controlled by a Social Security Commission,
hereinafter referred to as Commission, composed of the
Secretary of Labor and Employment or his duly designated
undersecretary, the SSS president and seven (7) appointive
members, three (3) of whom shall represent the workers group,
at least one of whom shall be a woman; three (3), the employers
group, at least one (1) of whom shall be a woman; and one (1),
the general public whose representative shall have adequate
knowledge and experience regarding social security, to be
appointed by the President of the Philippines. The six (6)
members representing workers and employers shall be chosen
from among the nominees of workers and employers
organizations, respectively. The Chairman of the Commission
shall be designated by the President of the Philippines from
among its members. The term of the appointive members shall be
three (3) years: Provided, That the terms of the first six (6)
appointive members shall be one (1), two (2) and three (3) years
for every two members, respectively: Provided, further, That they
shall continue to hold office until their successors shall have been
appointed and duly qualified. All vacancies, prior to the
expiration of the term, shall be filled for the unexpired term only.
The appointive members of the Commission shall receive at least
two thousand five hundred pesos (P2,500.00) per diem for each
meeting actually attended by them but not to exceed Ten
thousand pesos (P10,000.00) a month:: Provided, That members
of the Commission shall also receive a per diem of at least Two
thousand five hundred pesos (P2,500.00) but not to exceed
Fifteen thousand pesos (P15,000.00) a month: Provided ,
further, That said members of the Commission shall also receive
reasonable transportation and representation allowances as may
be fixed by the Commission, but not to exceed Ten thousand
pesos (P10,000.00) a month.
"(b) The general conduct of the operations and management
functions of the SSS shall be vested in the SSS President who shall
serve as the chief executive officer immediately responsible for
carrying out the program of the SSS and the policies of the
Commission. The SSS President shall be a person who has had
previous experience in the technical and administrative fields
related to the purposes of this Act. He shall be appointed by the
President of the Philippines and shall receive salary to be fixed by
the Commission with the approval of the President of the
Philippines, payable from the funds of the SSS.
"(c) The Commission, upon the recommendation of the SSS
President, shall appoint an actuary, and such other personnel as
may be deemed necessary, fix their reasonable compensation,
allowances and other benefits, prescribe their duties and
establish such methods and procedures as may be necessary to
insure the efficient, honest and economical administration of the
provisions and purposes of this Act: Provided, however, That the
personnel of the SSS below the rank of Vice-President shall be
appointed by the SSS President: Provided, further, That the
personnel appointed by the SSS President, except those below the
rank of assistant manager, shall be subject to the confirmation by
the Commission: Provided, further, That the personnel of the SSS
shall be selected only from civil service eligibles and be subject to
civil service rules and regulations:Provided, finally, That the SSS
shall be exempt from the provisions of Republic Act No. 6758 and
Republic Act No. 7430.
"SEC. 4. Powers and Duties of the Commission and SSS. - (a) The
Commission. - For the attainment of its main objectives as set
forth in Section 2 hereof, the Commission shall have the following
powers and duties:
"(1) To adopt, amend and rescind, subject to the approval of the
President of the Philippines, such rules and regulations as may be
necessary to carry out the provisions and purposes of this Act;
"(2) To establish a provident fund for the members which will
consist of voluntary contributions of employers and/or
employees, self-employed and voluntary members and their
earnings, for the payment of benefits to such members or their
beneficiaries, subject to such rules and regulations as it may
promulgate and approved by the President of the Philippines;
"(3) To maintain a provident fund which consists of contributions
made by both the SSS and its officials and employees and their
earnings, for the payment of benefits to such officials and
employees or their heirs under such terms and conditions as it
may prescribe;
"(4) To approve restructuring proposals for the payment of due
but unremitted contributions and unpaid loan amortizations
under such terms and conditions as it may prescribe;
"(5) To authorize cooperatives registered with the cooperative
development authority or associations registered with the
appropriate government agency to act as collecting agents of the
SSS with respect to their members: Provided, That the SSS shall
accredit the cooperative or association: Provided, further, That the
persons authorized to collect are bonded;
"(6) To compromise or release, in whole or in part, any interest,
penalty or any civil liability to SSS in connection with the
investments authorized under Section 26 hereof, under such
terms and conditions as it may prescribe and approved by the
President of the Philippines; and
"(7) To approve, confirm, pass upon or review any and all actions
of the SSS in the proper and necessary exercise of its powers and
duties hereinafter enumerated.
"(b) The Social Security System. - Subject to the provision of
Section four (4), paragraph seven (7) hereof, the SSS shall have
the following powers and duties:
"(1) To submit annually not later than April 30, a public report to
the President of the Philippines and to the Congress of the
Philippines covering its activities in the administration and
enforcement of this Act during the preceding year including
information and recommendations on broad policies for the
development and perfection of the program of the SSS;
"(2) To require the actuary to submit a valuation report on the
SSS benefit program every four (4) years, or more frequently as
may be necessary, to undertake the necessary actuarial studies
and calculations concerning increases in benefits taking into
account inflation and the financial stability of the SSS, and to
provide for feasible increases in benefits every four (4) years,
including the addition of new ones, under such rules and
regulations as the Commission may adopt, subject to the approval
of the President of the Philippines: Provided, That the actuarial
soundness of the reserve fund shall be guaranteed: Provided,
further, That such increases in benefits shall not require any
increase in the rate of contribution;
"(3) To establish offices of the SSS to cover as many provinces,
cities and congressional districts, whenever and wherever it may
be expedient, necessary and feasible, and to inspect or cause to
be inspected periodically such offices;
"(4) To enter into agreements or contracts for such service and
aid, as may be needed for the proper, efficient and stable
administration of the SSS;
"(5) To adopt, from time to time, a budget of expenditures
including salaries of personnel, against all funds available to the
SSS under this Act;
"(6) To set up its accounting system and provide the necessary
personnel therefor;
"(7) To require reports, compilations and analyses of statistical
and economic data and to make investigation as may be needed
for the proper administration and development of the SSS;
"(8) To acquire and dispose of property, real or personal, which
may be necessary or expedient for the attainment of the purposes
of this Act;
"(9) To acquire, receive, or hold, by way of purchase,
expropriation or otherwise, public or private property for the
purpose of undertaking housing projects preferably for the
benefit of low-income members and for the maintenance of
hospitals and institutions for the sick, aged and disabled, as well
as schools for the members and their immediate families;
"(10) To sue and be sued in court; and
"(11) To perform such other corporate acts as it may deem
appropriate for the proper enforcement of this Act.
"SEC. 5. Settlement of Disputes. - (a) Any dispute arising under this
Act with respect to coverage, benefits, contributions and
penalties thereon or any other matter related thereto, shall be
cognizable by the Commission, and any case filed with respect
thereto shall be heard by the Commission, or any of its members,
or by hearing officers duly authorized by the Commission and
decided within twenty (20) days after the submission of the
evidence. The filing, determination and settlement of disputes
shall be governed by the rules and regulations promulgated by
the Commission.
"(b) Appeal to Courts. - Any decision of the Commission, in the
absence of an appeal therefrom as herein provided, shall become
final and executory fifteen (15) days after the date of notification,
and judicial review thereof shall be permitted only after any party
claiming to be aggrieved thereby has exhausted his remedies
before the Commission. The Commission shall be deemed to be a
party to any judicial action involving any such decision, and may
be represented by an attorney employed by the Commission, or
when requested by the Commission, by the Solicitor General or
any public prosecutors.
"(c) Court Review. - The decision of the Commission upon any
disputed matter may be reviewed both upon the law and the facts
by the Court of Appeals. For the purpose of such review, the
procedure concerning appeals from the Regional Trial Court shall
be followed as far as practicable and consistent with the purposes
of this Act. Appeal from a decision of the Commission must be
taken within fifteen (15) days from notification of such decision.
If the decision of the Commission involves only questions of law,
the same shall be reviewed by the Supreme Court. No appeal
bond shall be required. The case shall be heard in a summary
manner, and shall take precedence over all cases, except that in
the Supreme Court, criminal cases wherein life imprisonment or
death has been imposed by the trial court shall take precedence.
No appeal shall act as a supersedeas or a stay of the order of the
Commission unless the Commission itself, or the Court of Appeals
or the Supreme Court, shall so order.
"(d) Execution of Decisions. - The Commission may, motu
proprio or on motion of any interested party, issue a writ of
execution to enforce any of its decisions or awards, after it has
become final and executory, in the same manner as the decision
of the Regional Trial Court by directing the city or provincial
sheriff or the sheriff whom it may appoint to enforce such final
decision or execute such writ; and any person who shall fail or
refuse to comply with such decision, award or writ, after being
required to do so shall, upon application by the Commission
pursuant to Rule 71 of the Rules of Court, be punished for
contempt.
"SEC. 6. Auditor and Counsel. - (a) The Chairman of the
Commission on Audit shall be the ex-officio Auditor of the SSS. He
or his representative shall check and audit all the accounts, funds
and properties of the SSS in the same manner and as frequently
as the accounts, funds and properties of the government are
checked and audited under existing laws, and he shall have, as far
as practicable, the same powers and duties as he has with respect
to the checking and auditing of public accounts, funds and
properties in general.
"(b) The Secretary of Justice shall be the ex-officio counsel of the
SSS. He or his representative shall act as legal adviser and counsel
thereof.
"SEC. 7. Oaths, Witnesses, and Production of Records. - When
authorized by the Commission, an official or employee thereof
shall have the power to administer oath and affirmation, take
depositions, certify to official acts, and
issue subpoena andsubpoena duces tecum to compel the
attendance of witnesses and the production of books, papers,
correspondence and other records deemed necessary as evidence
in connection with any question arising under this Act. Any case
of contumacy shall be dealt with by the Commission in
accordance with law.
"SEC. 8. Terms Defined. - For purposes of this Act, the following
terms shall, unless the context indicates otherwise, have the
following meanings:
"(a) SSS - The Social Security System created by this Act.
"(b) Commission - The Social Security Commission as herein
created.
"(c) Employer- Any person, natural or juridical, domestic or
foreign, who carries on in the Philippines any trade, business,
industry, undertaking, or activity of any kind and uses the
services of another person who is under his orders as regards the
employment, except the Government and any of its political
subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government: Provided,
That a self-employed person shall be both employee and
employer at the same time.
"(d) Employee - Any person who performs services for an
employer in which either or both mental or physical efforts are
used and who receives compensation for such services, where
there is an employer-employee relationship: Provided, That a self-
employed person shall be both employee and employer at the
same time.
"(e) Dependents - The dependents shall be the following:
"(1) The legal spouse entitled by law to receive support from the
member;
"(2) The legitimate, legitimated or legally adopted, and
illegitimate child who is unmarried, not gainfully employed, and
has not reached twenty-one (21) years of age, or if over twenty-
one (21) years of age, he is congenitally or while still a minor has
been permanently incapacitated and incapable of self-support,
physically or mentally; and
"(3) The parent who is receiving regular support from the
member.
"(f) Compensation - All actual remuneration for employment,
including the mandated cost-of-living allowance, as well as the
cash value of any remuneration paid in any medium other than
cash except that part of the remuneration in excess of the
maximum salary credit as provided under Section Eighteen of
this Act.
"(g) Monthly salary credit - The compensation base for
contributions and benefits as indicated in the schedule in Section
Eighteen of this Act.
"(h) Monthly - The period from one end of the last payroll period
of the preceding month to the end of the last payroll period of the
current month if compensation is on hourly, daily or weekly basis;
if on any other basis, monthly shall mean a period of one (1)
month.
"(i) Contribution - The amount paid to the SSS by and on behalf of
the members in accordance with Section Eighteen of this Act.
"(j) Employment - Any service performed by an employee for his
employer except:
"(1) Employment purely casual and not for the purpose of
occupation or business of the employer;
"(2) Service performed on or in connection with an alien vessel
by an employee if he is employed when such vessel is outside the
Philippines;
"(3) Service performed in the employ of the Philippine
Government or instrumentality or agency thereof;
"(4) Service performed in the employ of a foreign government or
international organization, or their wholly-owned
instrumentality: Provided, however, That this exemption
notwithstanding, any foreign government, international
organization or their wholly-owned instrumentality employing
workers in the Philippines or employing Filipinos outside of the
Philippines, may enter into an agreement with the Philippine
Government for the inclusion of such employees in the SSS except
those already covered by their respective civil service retirement
systems: Provided, further, That the terms of such agreement shall
conform with the provisions of this Act on coverage and amount
of payment of contributions and benefits: Provided, finally, That
the provisions of this Act shall be supplementary to any such
agreement; and
"(5) Such other services performed by temporary and other
employees which may be excluded by regulation of the
Commission. Employees of bona fide independent contractors
shall not be deemed employees of the employer engaging the
service of said contractors.
"(k) Beneficiaries - The dependent spouse until he or she
remarries, the dependent legitimate, legitimated or legally
adopted, and illegitimate children, who shall be the primary
beneficiaries of the member: Provided, That the dependent
illegitimate children shall be entitled to fifty percent (50%) of the
share of the legitimate, legitimated or legally adopted
children: Provided, further, That in the absence of the dependent
legitimate, legitimated children of the member, his/her
dependent illegitimate children shall be entitled to one hundred
percent (100%) of the benefits. In their absence, the dependent
parents who shall be the secondary beneficiaries of the member.
In the absence of all the foregoing, any other person designated
by the member as his/her secondary beneficiary.
"(l) Contingency - The retirement, death, disability, injury or
sickness and maternity of the member.
"(m) Average monthly salary credit - The result obtained by
dividing the sum of the last sixty (60) monthly salary credits
immediately preceding the semester of contingency by sixty (60),
or the result obtained by dividing the sum of all the monthly
salary credits paid prior to the semester of contingency by the
number of monthly contributions paid in the same period,
whichever is greater: Provided, That the injury or sickness which
caused the disability shall be deemed as the permanent disability
for the purpose of computing the average monthly salary credit.
"(n) Average daily salary credit- The result obtained by dividing
the sum of the six (6) highest monthly salary credits in the
twelve-month period immediately preceding the semester of
contingency by one hundred eighty (180).
"(o) Semester - A period of two (2) consecutive quarters ending in
the quarter of contingency.
"(p) Quarter - A period of three (3) consecutive calendar months
ending on the last day of March, June, September and December.
"(q) Credited years of service - For a member covered prior to
January nineteen hundred and eighty five (1985) minus the
calendar year of coverage plus the number of calendar years in
which six (6) or more contributions have been paid from January
nineteen hundred and eighty five (1985) up to the calendar year
containing the semester prior to the contingency. For a member
covered in or after January nineteen hundred and eighty five
(1985), the number of calendar years in which six (6) or more
contributions have been paid from the year of coverage up to the
calendar year containing the semester prior to the
contingency: Provided, That the Commission may provide for a
different number of contributions in a calendar year for it to be
considered as a credited year of service.
"(r) Member - The worker who is covered under Section Nine and
Section Nine-A of this Act.
"(s) Self-employed - Any person whose income is not derived from
employment, as defined under this Act, as well as those workers
enumerated in Section Nine-A hereof.
"(t) Net earnings - Net income before income taxes plus non-cash
charges such as depreciation and depletion appearing in the
regular financial statement of the issuing or assuming institution.
"(u) Fixed charges - Recurring expense such as amortization of
debt discount or rentals for leased properties, including interest
on funded and unfunded debt.
"SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory
upon all employees not over sixty (60) years of age and their
employers: Provided, That in the case of domestic helpers, their
monthly income shall not be less than One thousand pesos
(P1,000.00) a month: Provided, further, That any benefit already
earned by the employees under private benefit plans existing at
the time of the approval of this Act shall not be discontinued,
reduced or otherwise impaired: Provided, further,That private
plans which are existing and in force at the time of compulsory
coverage shall be integrated with the plan of the SSS in such a
way where the employers contribution to his private plan is
more than that required of him in this Act, he shall pay to the SSS
only the contribution required of him and he shall continue his
contribution to such private plan less his contribution to the SSS
so that the employers total contribution to his benefit plan and to
the SSS shall be the same as his contribution to his private benefit
plan before the compulsory coverage: Provided, further, That any
changes, adjustments, modifications, eliminations or
improvements in the benefits to be available under the remaining
private plan, which may be necessary to adopt by reason of the
reduced contributions thereto as a result of the integration, shall
be subject to agreements between the employers and employees
concerned: Provided, further, That the private benefit plan which
the employer shall continue for his employees shall remain under
the employers management and control unless there is an
existing agreement to the contrary: Provided, finally, That nothing
in this Act shall be construed as a limitation on the right of
employers and employees to agree on and adopt benefits which
are over and above those provided under this Act.
"(b) Spouses who devote full time to managing the household and
family affairs, unless they are also engaged in other vocation or
employment which is subject to mandatory coverage, may be
covered by the SSS on a voluntary basis.
"(c) Filipinos recruited by foreign-based employers for
employment abroad may be covered by the SSS on a voluntary
basis.
"SEC. 9-A. Compulsory Coverage of the Self-Employed. - Coverage in
the SSS shall also be compulsory upon such self-employed
persons as may be determined by the Commission under such
rules and regulations as it may prescribe, including but not
limited to the following:
"1. All self-employed professionals;
"2. Partners and single proprietors of businesses;
"3. Actors and actresses, directors, scriptwriters and news
correspondents who do not fall within the definition of the
term"employee" in Section 8 (d) of this Act;
"4. Professional athletes, coaches, trainers and jockeys; and
"5. Individual farmers and fishermen.
"Unless otherwise specified herein, all provisions of this Act
applicable to covered employees shall also be applicable to the
covered self-employed persons.
"SEC. 10. Effective Date of Coverage. - Compulsory coverage of the
employer shall take effect on the first day of his operation and
that of the employee on the day of his
employment: Provided, That the compulsory coverage of the self-
employed person shall take effect upon his registration with the
SSS.
"SEC. 11. Effect of Separation from Employment. - When an
employee under compulsory coverage is separated from
employment, his employers contribution on his account and his
obligation to pay contributions arising from that employment
shall cease at the end of the month of separation, but said
employee shall be credited with all contributions paid on his
behalf and entitled to benefits according to the provisions of this
Act. He may, however, continue to pay the total contributions to
maintain his right to full benefit.
"SEC. 11-A. Effect of Interruption of Business or Professional
Income. - If the self-employed realizes no income in any given
month, he shall not be required to pay contributions for that
month. He may, however, be allowed to continue paying
contributions under the same rules and regulations applicable to
a separated employee member: Provided, That no retroactive
payment of contributions shall be allowed other than as
prescribed under Section Twenty-two-A hereof.
"SEC. 12. Monthly Pension. - (a) The monthly pension shall be the
highest of the following amounts:
"(1) The sum of the following:
"(i) Three hundred pesos (P300.00; plus
"(ii) Twenty percent (20%) of the average monthly salary credit;
plus
"(iii) Two percent (2%) of the average monthly salary credit for
each credited year of service in excess of ten (10) years; or
"(2) Forth percent (40%) of the average monthly salary credit; or
"(3) One thousand pesos (P1,000.00): Provided, That the monthly
pension shall in no case be paid for an aggregate amount of less
than sixty (60) months.
"(b) Notwithstanding the preceding paragraph, the minimum
pension shall be One thousand two hundred pesos (P1,200.00)
for members with at least ten (10) credited years of service and
Two thousand four hundred pesos (P2,400.00) for those with
twenty (20) credited years of service.
"SEC. 12-A. Dependents Pension. - Where monthly pension is
payable on account of death, permanent total disability or
retirement, dependents pension equivalent to ten percent (10%)
of the monthly pension or Two hundred fifty pesos (P250.00),
whichever is higher, shall also be paid for each dependent child
conceived on or before the date of the contingency but not
exceeding five (5), beginning with the youngest and without
substitution: Provided, That where there are legitimate or
illegitimate children, the former shall be preferred.
SEC. 12-B. Retirement Benefits. - (a) A member who has paid at
least one hundred twenty (120) monthly contributions prior to
the semester of retirement and who: (1) has reached the age of
sixty (60) years and is already separated from employment or has
ceased to be self-employed; or (2) has reached the age of sixty-
five (65) years, shall be entitled for as long as he lives to the
monthly pension: Provided, That he shall have the option to
receive his first eighteen (18) monthly pensions in lump sum
discounted at a preferential rate of interest to be determined by
the SSS.
"(b) A covered member who is sixty (60) years old at retirement
and who does not qualify for pension benefits under paragraph
(a) above, shall be entitled to a lump sum benefit equal to the
total contributions paid by him and on his behalf:Provided, That
he is separated from employment and is not continuing payment
of contributions to the SSS on his own.
"(c) The monthly pension shall be suspended upon the
reemployment or resumption of self-employment of a retired
member who is less than sixty-five (65) years old. He shall again
be subject to Section Eighteen and his employer to Section
Nineteen of this Act.
"(d) Upon the death of the retired member, his primary
beneficiaries as of the date of his retirement shall be entitled to
receive the monthly pension: Provided, That if he has no primary
beneficiaries and he dies within sixty (60) months from the start
of his monthly pension, his secondary beneficiaries shall be
entitled to a lump sum benefit equivalent to the total monthly
pensions corresponding to the balance of the five-year
guaranteed period, excluding the dependents pension.
"(e) The monthly pension of a member who retires after reaching
age sixty (60) shall be the higher of either: (1) the monthly
pension computed at the earliest time he could have retired had
he been separated from employment or ceased to be self-
employed plus all adjustments thereto; or (2) the monthly
pension computed at the time when he actually retires.
"SEC. 13. Death Benefits. - Upon the death of a member who has
paid at least thirty-six (36) monthly contributions prior to the
semester of death, his primary beneficiaries shall be entitled to
the monthly pension: Provided, That if he has no primary
beneficiaries, his secondary beneficiaries shall be entitled to a
lump sum benefit equivalent to thirty-six (36) times the monthly
pension. If he has not paid the required thirty-six (36) monthly
contributions, his primary or secondary beneficiaries shall be
entitled to a lump sum benefit equivalent to the monthly pension
times the number of monthly contributions paid to the SSS or
twelve (12) times the monthly pension, whichever is higher.
"SEC. 13-A. Permanent Disability Benefits. - (a) Upon the
permanent total disability of a member who has paid at least
thirty-six (36) monthly contributions prior to the semester of
disability, he shall be entitled to the monthly
pension: Provided, That if he has not paid the required thirty-six
(36) monthly contributions, he shall be entitled to a lump sum
benefit equivalent to the monthly pension times the number of
monthly contributions paid to the SSS or twelve (12) times the
monthly pension, whichever is higher. A member who (1) has
received a lump sum benefit; and (2) is reemployed or has
resumed self-employment not earlier than one (1) year from the
date of his disability shall again be subject to compulsory
coverage and shall be considered a new member.
"(b) The monthly pension and dependents pension shall be
suspended upon the reemployment or resumption of self-
employment or the recovery of the disabled member from his
permanent total disability or his failure to present himself for
examination at least once a year upon notice by the SSS.
"(c) Upon the death of the permanent total disability pensioner,
his primary beneficiaries as of the date of disability shall be
entitled to receive the monthly pension: Provided, That if he has
no primary beneficiaries and he dies within sixty (60) months
from the start of his monthly pension, his secondary beneficiaries
shall be entitled to a lump sum benefit equivalent to the total
monthly pensions corresponding to the balance of the five-year
guaranteed period excluding the dependents pension.
"(d) The following disabilities shall be deemed permanent total: (90%) of his average daily salary credit, subject to the following
"1. Complete loss of sight of both eyes; conditions:
"2. Loss of two limbs at or above the ankle or wrists; "(1) In no case shall the daily sickness benefit be paid longer than
"3. Permanent complete paralysis of two limbs; one hundred twenty (120) days in one (1) calendar year, nor shall
"4. Brain injury resulting to incurable imbecility or insanity; and any unused portion of the one hundred twenty (120) days of
"5. Such cases as determined and approved by the SSS. sickness benefit granted under this section be carried forward
"(e) If the disability is permanent partial, and such disability and added to the total number of compensable days allowable in
occurs before thirty-six (36) monthly contributions have been the subsequent year;
paid prior to the semester of disability, the benefit shall be such "(2) The daily sickness benefit shall not be paid for more than
percentage of the lump sum benefit described in the preceding two hundred forty (240) days on account of the same
paragraph with due regard to the degree of disability as the confinement; and
Commission may determine. "(3) The employee member shall notify his employer of the fact of
"(f) If the disability is permanent total and such disability occurs his sickness or injury within five (5) calendar days after the start
after thirty-six (36) monthly contributions have been paid prior of his confinement unless such confinement is in a hospital or the
to the semester of disability, the benefit shall be the monthly employee became sick or was injured while working or within
pension for permanent total disability payable not longer than the premises of the employer in which case, notification to the
the period designated in the following schedule: employer is necessary: Provided, That if the member is
COMPLETE unemployed or self-employed, he shall directly notify the SSS of
AND PERMANENT NUMBER OF his confinement within five (5) calendar days after the start
LOSS OF USE OF MONTHS thereof unless such confinement is in a hospital in which case
One thumb 10 notification is also not necessary: Provided, further, That in cases
One index finger 8 where notification is necessary, the confinement shall be deemed
One middle finger 6 to have started not earlier than the fifth day immediately
One ring finger 5 preceding the date of notification.
One little finger 3 "(b) The compensable confinement shall begin on the first day of
One big toe 6 sickness, and the payment of such allowances shall be promptly
One hand 39 made by the employer every regular payday or on the fifteenth
One arm 50 and last day of each month, and similarly in the case of direct
One foot 31 payment by the SSS, for as long as such allowances are due and
One leg 46 payable: Provided, That such allowance shall begin only after all
One ear 10 sick leaves of absence with full pay to the credit of the employee
Both ears 20 member shall have been exhausted.
Hearing of one ear 10 "(c) One hundred percent (100%) of the daily benefits provided
Hearing of both ears 50 in the preceding paragraph shall be reimbursed by the SSS to said
Sight of one eye 25 employer upon receipt of satisfactory proof of such payment and
"(g) The percentage degree of disability which is equivalent to the legality thereof: Provided, That the employer has notified the SSS
ratio that the designated number of months of compensability of the confinement within five (5) calendar days after receipt of
bears to seventy-five (75), rounded to the next higher integer, the notification from the employee member:Provided,
shall not be additive for distinct, separate and unrelated further, That if the notification to the SSS is made by the employer
permanent partial disabilities, but shall be additive for beyond five (5) calendar days after receipt of the notification
deteriorating and related permanent partial disabilities to a from the employee member, said employer shall be reimbursed
maximum of one hundred percent (100%), in which case, the only for each day of confinement starting from the tenth calendar
member shall be deemed as permanently totally disabled. day immediately preceding the date of notification to the
"(h) In case of permanent partial disability, the monthly pension SSS: Provided, finally, That the SSS shall reimburse the employer
benefit shall be given in lump sum if it is payable for less than or pay the unemployed member only for confinement within the
twelve (12) months. one-year period immediately preceding the date the claim for
"(i) For the purpose of adjudicating retirement, death and benefit or reimbursement is received by the SSS, except
permanent total disability pension benefits, contributions shall confinement in a hospital in which case the claim for benefit or
be deemed paid for the months during which the member reimbursement must be filed within one (1) year from the last
received partial disability pension: Provided, That such day of confinement.
contributions shall be based on his last contribution prior to his "(d) Where the employee member has given the required
disability. notification but the employer fails to notify the SSS of the
"(j) Should a member who is on partial disability pension retire confinement or to file the claim for reimbursement within the
or die, his disability pension shall cease upon his retirement or period prescribed in this section resulting in the reduction of the
death. benefit or denial of the claim, such employer shall have no right to
"SEC. 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve recover the corresponding daily allowance he advanced to the
thousand pesos (P12,000.00) shall be paid, in cash or in kind, to employee member as required in this section.
help defray the cost of funeral expenses upon the death of a "(e)The claim of reimbursement shall be adjudicated by the SSS
member, including permanently totally disabled member or within a period of two (2) months from receipt
retiree. thereof:Provided, That should no payment be received by the
"SEC. 14. Sickness Benefit. - (a) A member who has paid at least employer within one (1) month after the period prescribed
three (3) monthly contributions in the twelve-month period herein for adjudication, the reimbursement shall thereafter earn
immediately preceding the semester of sickness or injury and is simple interest of one percent (1%) per month until paid.
confined therefor for more than three (3) days in a hospital or "(f) The provisions regarding the notification required of the
elsewhere with the approval of the SSS, shall, for each day of member and the employer as well as the period within which the
compensable confinement or a fraction thereof, be paid by his claim for benefit or reimbursement may be filed shall apply to all
employer, or the SSS, if such person is unemployed or self- claims filed with the SSS.
employed, a daily sickness benefit equivalent to ninety percent
"SEC. 14-A. Maternity Leave Benefit. - A female member who has the person or persons entitled thereto, except to pay any debt of
paid at least three (3) monthly contributions in the twelve-month the member to the SSS. No tax measure of whatever nature
period immediately preceding the semester of her childbirth or enacted shall apply to the SSS, unless it expressly revokes the
miscarriage shall be paid a daily maternity benefit equivalent to declared policy of the State in Section 2 hereof granting tax-
one hundred percent (100%) of her average daily salary credit exemption to the SSS. Any tax assessment imposed against the
for sixty (60) days or seventy-eight (78) days in case of caesarian SSS shall be null and void. (As amended by Sec. 9, P. D. No. 24, S.
delivery, subject to the following conditions: 1972; and Sec. 14, P. D. No. 735, S. 1975).
"(a) That the employee shall have notified her employer of her "SEC. 17. Fee of Agents, Attorneys, Etc. - No agent, attorney or
pregnancy and the probable date of her childbirth, which notice other person in charge of the preparation, filing or pursuing any
shall be transmitted to the SSS in accordance with the rules and claim for benefit under this Act shall demand or charge for his
regulations it may provide; services any fee, and any stipulation to the contrary shall be null
"(b) The full payment shall be advanced by the employer within and void. The retention or deduction of any amount from any
thirty (30) days from the filing of the maternity leave application; benefit granted under this Act for the payment of fees for such
"(c) That payment of daily maternity benefits shall be a bar to the services is prohibited: Provided, however, That any member of the
recovery of sickness benefits provided by this Act for the same Philippine Bar who appears as counsel in any case heard by the
period for which daily maternity benefits have been received; Commission shall be entitled to attorneys fees not exceeding ten
"(d) That the maternity benefits provided under this section shall percent (10%) of the benefits awarded by the Commission, which
be paid only for the first four (4) deliveries or miscarriages; fees shall not be payable before the actual payment of the
"(e) That the SSS shall immediately reimburse the employer of benefits, and any stipulation to the contrary shall be null and
one hundred percent (100%) of the amount of maternity benefits void.
advanced to the employee by the employer upon receipt of "Any violation of the provisions of this Section shall be punished
satisfactory proof of such payment and legality thereof; and by a fine of not less than Five hundred pesos (P500.00) nor more
"(f) That if an employee member should give birth or suffer than Five thousand pesos (P5,000.00), or imprisonment for not
miscarriage without the required contributions having been less than six (6) months nor more than one (1) year, or both, at
remitted for her by her employer to the SSS, or without the latter the discretion of the court.
having been previously notified by the employer of the time of the "SEC. 18. Employees Contributions. - (a) Beginning as of the last
pregnancy, the employer shall pay to the SSS damages equivalent day of the calendar month when an employees compulsory
to the benefits which said employee member would otherwise coverage takes effect and every month thereafter during his
have been entitled to. employment, the employer shall deduct and withhold from such
"SEC. 15. Non-Transferability of Benefits. - The SSS shall promptly employees monthly salary, wage, compensation or earnings, the
pay the benefits provided in this Act to such persons as may be employees contribution in an amount corresponding to his
entitled thereto in accordance with the provisions of this salary, wage, compensation or earnings during the month in
Act: Provided, That the SSS shall pay the retirement benefits on accordance with the following schedule:
the day of contingency to qualified members who have submitted SALARY RANGE OF MONTHLY MONTHLY
the necessary documents at least six (6) months before:Provided, CONTRIBUTION
further, That the beneficiary who is a national of a foreign country BRACKET COMPENSATION SALARY
which does not extend benefits to a Filipino beneficiary residing CREDIT EMPLOYER
in the Philippines, or which is not recognized by the Philippines, EMPLOYEE TOTAL
shall not be entitled to receive any benefit under this I 1,000.00 - 1,249.99 1000 50.70
Act: Provided, further, That notwithstanding the foregoing, where 33.30 84.00
the best interest of the SSS will be served, the Commission may II 1,250.00 - 1,749.99 1500 76.00
direct payments without regard to nationality or country of 50.00 126.00
residence: Provided, further, That if the recipient is a minor or a III 1,750.00 - 2,249.99 2000 101.30
person incapable of administering his own affairs, the 66.70 168.00
Commission shall appoint a representative under such terms and IV 2,250.00 - 2,749.99 2500 126.70
conditions as it may deem proper: Provided, further, That such 83.30 210.00
appointment shall not be necessary in case the recipient is under V 2,750.00 - 3,249.99 3000 152.00
the custody of or living with the parents or spouse of the member 100.00 252.00
in which case the benefits shall be paid to such parents or spouse, VI 3,250.00 - 3,749.99 3500 177.30
as representative payee of the recipient. Such benefits are not 116.70 294.00
transferable and no power of attorney or other document VII 3,750.00 - 4,249.99 4000 202.70
executed by those entitled thereto in favor of any agent, attorney 133.30 336.00
or any other person for the collection thereof on their behalf shall VIII 4,250.00 - 4,749.99 4500 228.00
be recognized, except when they are physically unable to collect 150.00 378.00
personally such benefits:Provided, further, That in case of death IX 4,750.00 - 5,249.99 5000 253.30
benefits, if no beneficiary qualifies under this Act, said benefits 166.70 420.00
shall be paid to the legal heirs in accordance with the law of X 5,250.00 - 5,749.99 5500 278.70
succession. 183.70 462.40
"SEC. 16. Exemption from Tax, Legal Process and Lien. -- All laws to XI 5,750.00 - 6,249.99 6000 304.00
the contrary notwithstanding, the SSS and all its assets and 200.00 504.00
properties, all contributions collected and all accruals thereto and XII 6,250.00 - 6,749.99 6500 329.30
income or investment earnings therefrom as well as all supplies, 216.78 546.00
equipment, papers or documents shall be exempt from any tax, XIII 6,750.00 - 7,249.99 7000 354.70
assessment, fee, charge, or customs or import duty; and all 233.30 588.00
benefit payments made by the SSS shall likewise be exempt from XIV 7,250.00 - 7,749.99 7500 380.00
all kinds of taxes, fees or charges, and shall not liable to 250.00 630.00
attachments, garnishments, levy or seizure by or under any legal XV 7,750.00 - 8.249.99 8000 403.30
or equitable process whatsoever, either before or after receipt by 266.70 672.00
 XVI 8,250.00 - 8,749.99 8500 430.70
283.30 714.00
XVII 8,750.00 - OVER 9000 456.00
300.00 756.00
"The foregoing schedule of contribution shall also apply to self-
employed and voluntary members.
"The maximum monthly salary credit shall be Nine thousand
pesos (P9,000.00) effective January Nineteen hundred and ninety
six (1996); Provided, That it shall be increased by One thousand
pesos (P1,000.00) every year thereafter until it shall have
reached Twelve thousand pesos (P12,000.00) by Nineteen
hundred and ninety nine (1999): Provided, further, That the
minimum and maximum monthly salary credits as well as the
rate of contributions may be fixed from time to time by the
Commission through rules and regulations taking into
consideration actuarial calculations and rate of benefits, subject
to the approval of the President of the Philippines.
"SEC. 19. Employers Contributions. - (a) Beginning as of the last
day of the month when an employees compulsory coverage takes
effect and every month thereafter during his employment, his
employer shall pay, with respect to such covered employee, the
employers contribution in accordance with the schedule
indicated in Section Eighteen of this Act. Notwithstanding any
contract to the contrary, an employer shall not deduct, directly or
indirectly, from the compensation of his employees covered by
the SSS or otherwise recover from them the employers
contributions with respect to such employees.
"(b) The remittance of such contributions by the employer shall
be supported by a quarterly collection list to be submitted to the
SSS at the end of each calendar quarter indicating the correct ID
number of the employer, the correct names and the SSS numbers
of the employees and the total contributions paid for their
account during the quarter.
"SEC. 19-A. Contributions of the Self-Employed Member. - The
contributions to the SSS of the self-employed member shall be
determined in accordance with Section Eighteen of this
Act: Provided, That the monthly earnings declared by the self-
employed member at the time of his registration with the SSS
shall be considered as his monthly compensation and he shall pay
both the employer and the employee contributions: Provided,
further, That the contributions of self-employed persons earning
One thousand pesos (P1,000.00) monthly or below may be
reduced by the Commission.
"The monthly earnings declared by the self-employed member at
the time of his registration shall remain the basis of his monthly
salary credit, unless he makes another declaration of his monthly
earnings, in which case such latest declaration becomes the new
basis of his monthly salary credit.
"SEC. 20. Government Contribution. - As the contribution of the
Government to the operation of the SSS, Congress shall annually
appropriate out of any funds in the National Treasury not
otherwise appropriated, the necessary sum or sums to meet the
estimated expenses of the SSS for each ensuing year. In addition
to this contribution, Congress shall appropriate from time to time
such sum or sums as may be needed to assure the maintenance of
an adequate working balance of the funds of the SSS as disclosed
by suitable periodic actuarial studies to be made of the
operations of the SSS.
"SEC. 21. Government Guarantee. -- The benefits prescribed in this
Act shall not be diminished and to guarantee said benefits the
Government of the Republic of the Philippines accepts general
responsibility for the solvency of the SSS.
"SEC. 22. Remittance of Contributions. -- (a) The contributions
imposed in the preceding Section shall be remitted to the SSS
within the first ten (10) days of each calendar month following
the month for which they are applicable or within such time as
the Commission may prescribe. Every employer required to
deduct and to remit such contributions shall be liable for their
payment and if any contribution is not paid to the SSS as herein
prescribed, he shall pay besides the contribution a penalty
thereon of three percent (3%) per month from the date the
contribution falls due until paid. If deemed expedient and
advisable by the Commission, the collection and remittance of
contributions shall be made quarterly or semi-annually in
advance, the contributions payable by the employees to be
advanced by their respective employers: Provided, That upon
separation of an employee, any contribution so paid in advance
but not due shall be credited or refunded to his employer.
"(b) The contributions payable under this Act in cases where an
employer refuses or neglects to pay the same shall be collected by
the SSS in the same manner as taxes are made collectible under
the National Internal Revenue Code, as amended. Failure or
refusal of the employer to pay or remit the contributions herein
prescribed shall not prejudice the right of the covered employee
to the benefits of the coverage.
"The right to institute the necessary action against the employer
may be commenced within twenty (20) years from the time the
delinquency is known or the assessment is made by the SSS, or
from the time the benefit accrues, as the case may be.
"(c) Should any person, natural or juridical, default in any
payment of contributions, the Commission may also collect the
same in either of the following ways:
"1. By an action in court, which shall hear and dispose of the case
in preference to any other civil action; or
"2. By issuing a warrant to the Sheriff of any province or city
commanding him to levy upon and sell any real and personal
property of the debtor. The Sheriffs sale by virtue of said warrant
shall be governed by the same procedure prescribed for
executions against property upon judgments by a court of record.
"(d) The last complete record of monthly contributions paid by
the employer or the average of the monthly contributions paid
during the past three (3) years as of the date of filing of the action
for collection shall be presumed to be the monthly contributions
payable by and due from the employer to the SSS for each of the
unpaid month, unless contradicted and overcome by other
evidence: Provided, That the SSS shall not be barred from
determining and collecting the true and correct contributions due
the SSS even after full payment pursuant to this paragraph, nor
shall the employer be relieved of his liability under Section
Twenty-eight of this Act.
"SEC. 22-A. Remittance of Contributions of Self-Employed Member.
- Self-employed members shall remit their monthly contributions
quarterly on such dates and schedules as the Commission may
specify through rules and regulations: Provided,That no
retroactive payment of contributions shall be allowed, except as
provided in this Section.
"SEC. 23. Method of Collection and Payment. - The SSS shall
require a complete and proper collection and payment of
contributions and proper identification of the employer and the
employee. Payment may be made in cash, checks, stamps,
coupons, tickets, or other reasonable devices that the
Commission may adopt.
"SEC. 24. Employment Records and Reports. - (a) Each employer
shall immediately report to the SSS the names, ages, civil status,
occupations, salaries and dependents of all his employees who
are subject to compulsory coverage: Provided, That if an
employee subject to compulsory coverage should die or become
sick or disabled or reach the age of sixty (60) without the SSS
having previously received any report or written communication
about him from his employer, the said employer shall pay to the
SSS damages equivalent to the benefits to which said employee
member would have been entitled had his name been reported
on time by the employer to the SSS, except that in case of pension
benefits, the employer shall be liable to pay the SSS damages
equivalent to the accumulated pension due as of the date of
settlement of the claim or to the five (5) years pension, including
dependents pension: Provided, further, That if the contingency
occurs within thirty (30) days from the date of employment, the
employer shall be relieved of his liability for damages: Provided,
further, That any person or entity engaging the services of an
independent contractor shall be subsidiarily liable with such
contractor for any civil liability incurred by the latter under this
Act: Provided, finally, That the same person or entity engaging the
services of an independent contractor shall require such
contractor to post a surety bond to guarantee the payment of the
workers benefits.
"(b) Should the employer misrepresent the true date of
employment of the employee member or remit to the SSS
contributions which are less than those required in this Act or fail
to remit any contribution due prior to the date of contingency,
resulting in a reduction of benefits, the employer shall pay to the
SSS damages equivalent to the difference between the amount of
benefit to which the employee member or his beneficiary is
entitled had the proper contributions been remitted to the SSS
and the amount payable on the basis of contributions actually
remitted: Provided, That if the employee member or his
beneficiary is entitled to pension benefits, damages shall be
equivalent to the accumulated pension due as of the date of
settlement of the claim or to the five (5) years pension,
whichever is higher, including dependents pension.
"In addition to the liability mentioned in the preceding
paragraphs (a) and (b) hereof, the employer shall also be liable
for the corresponding unremitted contributions and penalties
thereon.
"(c) The records and reports duly accomplished and submitted to
the SSS by the employer or the member, as the case may be, shall
be kept confidential by the SSS except in compliance with
a subpoena duces tecum issued by the Court, shall not be divulged
without the consent of the SSS President or any official of the SSS
duly authorized by him, shall be presumed correct as to the data
and other matters stated therein, unless the necessary
corrections to such records and reports have been properly made
by the parties concerned before the right to the benefit being
claimed accrues, and shall be made the basis for the adjudication
of the claim. If as a result of such adjudication the SSS in good
faith pays a monthly pension to a beneficiary who is inferior in
right to another beneficiary or with whom another beneficiary is
entitled to share, such payments shall discharge the SSS from
liability unless and until such other beneficiary notifies the SSS of
his claim prior to the payments.
"(d) Every employer shall keep true and accurate work records
for such period and containing such information as the
Commission may prescribe, in addition to an "Annual Register of
New and Separated Employees" which shall be secured from the
SSS wherein the employer shall enter on the first day of
employment or on the effective date of separation, the names of
the persons employed or separated from employment, their SSS
numbers, and such other data that the Commission may require
and said annual register shall be submitted to the SSS in the
month of January of each year. Such records shall be open for
inspection by the SSS or its authorized representatives quarterly
or as often as the SSS may require.
"The SSS may also require each employer to submit, with respect
to the persons in his employ, reports needed for the effective
administration of this Act.
"(e) Each employer shall require, as a condition to employment,
the presentation of a registration number secured by the
prospective employee from the SSS in accordance with such
procedure as the SSS may adopt: Provided, That in case of
employees who have been assigned registration numbers by
virtue of a previous employment, such numbers originally
assigned to them should be used for purposes of this
Section: Provided, further, That the issuance of such registration
numbers by the SSS shall not exempt the employer from
complying with the provisions of paragraph (a) of this Section.
"(f) Notwithstanding any law to the contrary, microfilm, or non-
erasable optical disk and other similar archival media copies of
original SSS records and reports, duly certified by the official
custodian thereof, shall have the same evidentiary value as the
originals and be admissible as evidence in all legal proceedings.
"(g) Notwithstanding any law to the contrary, local government
units shall, prior to issuing any annual business license or permit,
require submission of certificate of SSS coverage and compliance
with the provisions of this Act: Provided, That the certification or
clearance shall be issued by the SSS within five (5) working days
from receipt of the request.
"SEC. 24-A. Report and Registration of the Self-Employed Member. -
Each covered self-employed person shall, within thirty (30) days
from the first day he started the practice of his profession or
business operations register and report to the SSS his name, age,
civil status, and occupation, average monthly net income and his
dependents.
"SEC. 25. Deposits and Disbursements. - All money paid to or
collected by the SSS every year under this Act, and all accruals
thereto shall be deposited, administered and disbursed in the
same manner and under the same conditions and requirements
as provided by law for other public special funds: Provided, That
not more than twelve percent (12%) of the total yearly
contributions plus three percent (3%) of other revenues shall be
disbursed for operational expenses such as salaries and wages,
supplies and materials, depreciation and the maintenance of
offices of the SSS: Provided, further, That if the expenses in any
year are less than the maximum amount permissible, the
difference shall not be availed of as additional expenses in the
following years.
"SEC. 26. Investment of Reserve Funds. - All revenues of the SSS
that are not needed to meet the current administrative and
operational expenses incidental to the carrying out of this Act
shall be accumulated in a fund to be known as the "Reserve
Fund." Such portions of the Reserve Fund as are not needed to
meet the current benefit obligations thereof shall be known as
the "Investment Reserve Fund" which the Commission shall
manage and invest with the skill, care, prudence and diligence
necessary under the circumstances then prevailing that a prudent
man acting in like capacity and familiar with such matters would
exercise in the conduct of an enterprise of a like character and
with similar aims. Pursuant thereto, and in line with the basic
principles of safety, good yield and liquidity, the Commission shall
invest the funds to earn an annual income not less than the
average rates of treasury bills or any other acceptable market
yield indicator in any or in all of the following:
"(a) In bonds, securities, promissory notes or other evidence of
indebtedness of the Government of the Philippines, or in bonds,
securities, promissory notes or other evidence of indebtedness to
which the full faith, credit and unconditional guarantee of the
Government of the Philippines is pledged;
"(b) In bonds, securities, promissory notes or other evidence of
indebtedness of the Government of the Philippines, or any
agencies or instrumentalities to finance domestic infrastructure
projects such as roads, bridges, ports, telecommunications, and
other similar projects: Provided, That the instruments issued by
an agency or instrumentality of the government shall be
guaranteed by the Government of the Philippines or any
government financial institution or acceptable multilateral
agency:Provided, further, That the SSS shall have priority over the
revenues of the projects: Provided, finally, That such investments
shall not exceed thirty percent (30%) of the Investment Reserve
Fund;
"(c) In bonds, securities, promissory notes or other evidence of
indebtedness of government financial institutions or government
corporations with acceptable credit or guarantee: Provided, That
such investments shall not exceed thirty percent (30%) of the
Investment Reserve Fund;
"(d) In bonds, securities, promissory notes or other evidence of
indebtedness of any bank doing business in the Philippines and in
good standing with the Bangko Sentral ng Pilipinas to finance
loans to private corporations doing business in the Philippines,
including schools, hospitals, small-and-medium scale industries,
cooperatives and non-governmental organizations, in which case
the collaterals or securities shall be assigned to the SSS under
such terms and conditions as the Commission may
prescribe: Provided, That in the case of bank deposits, they shall
not exceed at any time the unimpaired capital and surplus or total
private deposits of the depository bank, whichever is
smaller: Provided, further, That said bank shall first have been
designated as a depository for this purpose by the Monetary
Board of the Bangko Sentral ng Pilipinas: Provided, finally, That
such investments shall not exceed forty percent (40%) of the
Investment Reserve Fund;
"(e) In bonds, securities, promissory notes or other evidence of
indebtedness of shelter agencies of the National Government or
financial intermediaries to finance housing loans of members;
and in long-term direct individual or group housing loans giving
priority to the low-income groups, up to a maximum of ninety
percent (90%) of the appraised value of the properties to be
mortgaged by the borrowers; and
"In short and medium term loans to members such as salary,
educational, livelihood, marital, calamity and emergency
loans:Provided, That not more than thirty five percent (35%) of
the Investment Reserve Fund at any time shall be invested for
housing purposes: Provided, further, That not more than ten
percent (10%) of the Investment Reserve Fund shall be invested
in short and medium term loans;
"(f) In bonds, securities, promissory notes or other evidence of
indebtedness of educational or medical institutions to finance the
construction, improvement and maintenance of schools and
hospitals and their equipment and facilities: Provided, That such
investments shall not exceed ten percent (10%) of the Investment
Reserve Fund;
"(g) In real estate property, including shares of stocks involving
real estate property, and investment secured by first mortgages
on real estate or other collaterals acceptable to the
SSS: Provided, That such projects and investments shall, in the
determination of the Commission, redound to the benefit of the
SSS, its members, as well as the general public: Provided,
further, That investment in real estate property, including shares
of stocks involving real estate property shall not exceed five
percent (5%) of the Investment Reserve Fund: Provided,
finally, That investments in other income earning projects and
investments secured by first mortgages or other collaterals shall
not exceed twenty five percent (25%) of the Investment Reserve
Fund;
"(h) In bonds, debentures, securities, promissory notes or other
evidence of indebtedness of any prime corporation or
multilateral institutions to finance domestic
projects: Provided, That the issuing or assuming entity or its
predecessors shall not have defaulted in the payment of interest
on any of its securities and that during each of any three (3)
including the last two (2) of the five (5) fiscal years next
preceding the date of acquisition by the SSS of such bonds,
debentures or other evidence of indebtedness, the net earnings of
the issuing or assuming institution available for its fixed charges,
as defined in this Act, shall have been not less than one and one-
quarter times the total of its fixed charges for such year: Provided,
further,That such investments shall not exceed thirty percent
(30%) of the Investment Reserve Fund;
"(i) In preferred or common shares of stocks listed or about to be
listed in the stock exchange or options or warrants to such stocks
or, subject to prior approval of the Bangko Sentral ng Pilipinas,
such other risk management instruments of any prime or solvent
corporation or financial institution created or existing under the
laws of the Philippines with proven track record of profitability
over the last three (3) years and payment of dividends at least
once over the same period: Provided, That such investments shall
not exceed thirty percent (30%) of the Investment Reserve Fund;
"(j) In domestic or foreign mutual funds in existence for at least
three (3) years; Provided, That such investments shall not exceed
twenty percent (20%) of the Investment Reserve Fund: Provided,
further, That investments in foreign mutual funds shall not exceed
one percent (1%) of the Investment Reserve Fund in the first year
which shall be increased by one percent (1%) for each succeeding
year, but in no case shall it exceed seven and one-half percent
(7.5%) of the Investment Reserve Fund;
"(k) In foreign currency deposits or triple "A" foreign currency
denominated debts, prime and non-speculative equities, and
other Bangko Sentral ng Pilipinas approved financial instruments
or other assets issued in accordance with the existing laws of the
countries where such financial instruments are
issued: Provided, That these instruments or assets are listed in
bourses of the respective countries where these instruments or
assets are issued: Provided, further, That the issuing company has
proven track of record of profitability over the last three (3) years
and a record of regular dividend pay-out over the same
period: Provided, finally, That such investments shall not exceed
one percent (1%) of the Investment Reserve Fund in the first year
which shall be increased by one percent (1%) for each succeeding
year, but in no case shall it exceed seven and one-half percent
(7.5%) of the Investment Reserve Fund;
"(l) In loans secured by such collaterals like cash, government
securities or guarantees of multilateral institutions: Provided,That
such investments shall not exceed thirty percent (30%) of the
Investment Reserve Fund; and
"(m) In other Bangko Sentral ng Pilipinas approved investment
instruments with the same intrinsic quality as those enumerated
in paragraphs (a) to (l) hereof, subject to the policies and
guidelines which the Commission may formulate.
"No portion of the Investment Reserve Fund or income thereof
shall accrue to the general fund of the National Government or to
any of its agencies or instrumentalities, including government-
owned or controlled corporations, except as may be allowed
under this Act: Provided, That no portion of the Investment
Reserve Fund shall be invested for any purpose or in any
instrument, institution or industry over and above the prescribed
cumulative ceilings as follows:
40% in private securities
35% in housing
30% in real estate related investments
10% in short and medium-term member loans
30% in government financial institutions and corporations
30% in infrastructure projects
15% in any particular industry
7.5% in foreign-currency denominated investments
"SEC. 26-A. Fund Managers. - As part of its investment operations,
the SSS may appoint local or, in the absence thereof, foreign fund
managers to manage the Investment Reserve Fund, as it may
deem appropriate.
"SEC. 26-B. Mortgagor Insurance Account. - (a) As part of its
investment operations, the SSS shall act as insurer of all or part of
its interest on SSS properties mortgaged to the SSS, or lives of
mortgagors whose properties are mortgaged to the SSS. For this
purpose, the SSS shall establish a separate account to be known
as the "Mortgagors Insurance Account." All amounts received by
the SSS in connection with the aforesaid insurance operations
shall be placed in the Mortgagors Insurance Account. The assets
and liabilities of the Mortgagors Insurance Account shall at all
times be clearly identifiable and distinguishable from the assets
and liabilities in all other accounts of the SSS. Notwithstanding
any provision of law to the contrary, the assets held in the
Mortgagors Insurance Account shall not be chargeable with the
liabilities arising out of any other business the SSS may conduct
but shall be held and applied exclusively for the benefit of the
owners or beneficiaries of the insurance contracts issued by the
SSS under this paragraph.
"(b) The SSS may insure any of its interest or part thereof with
any private company or reinsurer. The Insurance Commission or
its authorized representatives shall make an examination into the
financial condition and methods of transacting business of the
SSS at least once in two (2) years, but such examination shall be
limited to the insurance operation of the SSS as authorized under
this paragraph and shall not embrace the other operations of the
SSS; and the report of said examination shall be submitted to the
Commission and a copy thereof shall be furnished the Office of
the President of the Philippines within a reasonable time after the
close of the examination: Provided, That for each examination, the
SSS shall pay to the Insurance Commission an amount equal to
the actual expense of the Insurance Commission in the conduct of
examination, including the salaries of the examiners and of the
actuary of the Insurance Commission who have been assigned to
make such examination for the actual time spent in said
examination: Provided, further, That the general law on insurance
and the rules and regulations promulgated thereunder shall have
suppletory application insofar as it is not in conflict with this Act
and its rules and regulations.
"SEC. 27. Records and Reports. - The SSS President shall keep and
cause to keep records of operations of the funds of the SSS and of
disbursements thereof and all accounts of payments made out of
said funds. During the month of January of each year, the SSS
President shall prepare for submission to the President of the
Philippines and to Congress of the Philippines a report of
operations of the SSS during the preceding year, including
statistical data on the number of persons covered and benefited,
their occupations and employment status, the duration and
amount of benefits paid, the finances of the SSS at the close of the
said year, and recommendations. He shall also cause to be
published in two (2) newspapers of general circulation in the
Philippines a synopsis of the annual report, showing in particular
the status of the finances of the SSS and the benefits
administered.
"SEC. 28. Penal Clause. - (a) Whoever, for the purpose of causing
any payment to be made under this Act, or under an agreement
thereunder, where none is authorized to be paid, shall make or
cause to be made false statement or representation as to any
compensation paid or received or whoever makes or causes to be
made any false statement of a material fact in any claim for any
benefit payable under this Act, or application for loan with the
SSS, or whoever makes or causes to be made any false statement,
representation, affidavit or document in connection with such
claim or loan, shall suffer the penalties provided for in Article One
hundred seventy-two of the Revised Penal Code.
"(b) Whoever shall obtain or receive any money or check under
this Act or any agreement thereunder, without being entitled
thereto with intent to defraud any member, employer or the SSS,
shall be fined not less than Five thousand pesos (P5,000.00) nor
more than Twenty thousand pesos (P20,000.00) and imprisoned
for not less than six (6) years and one (1) day nor more than
twelve (12) years.
"(c) Whoever buys, sells, offers for sale, uses, transfers or takes or
gives in exchange, or pledges or gives in pledge, except as
authorized in this Act or in regulations made pursuant thereto,
any stamp, coupon, ticket, book or other device, prescribed
pursuant to Section Twenty-three hereof by the Commission for
the collection or payment of contributions required herein, shall
be fined not less than Five thousand pesos (P5,000.00) nor more
than Twenty thousand pesos (P20,000.00), or imprisoned for not
less than six (6) years and one (1) day nor more than twelve (12)
years, or both, at the discretion of the court.
"(d) Whoever, with intent to defraud, alters, forges, makes or
counterfeits any stamp, coupon, ticket, book or other device
prescribed by the Commission for the collection or payment of
any contribution required herein, or uses, sells, lends, or has in
his possession any such altered, forged or counterfeited
materials, or makes, uses, sells or has in his possession any such
altered, forged, material in imitation of the material used in the
manufacture of such stamp, coupon, ticket, book or other device,
shall be fined not less than Five thousand pesos (P5,000.00) non
more than Twenty thousand pesos (P20,000.00) or imprisoned
for not less than six years (6) and one (1) day nor more than
twelve (12) years, or both, at the discretion of the court.
"(e) Whoever fails or refuses to comply with the provisions of this
Act or with the rules and regulations promulgated by the
Commission, shall be punished by a fine of not less than Five
thousand pesos (P5,000.00) nor more than Twenty thousand
pesos (P20,000.00), or imprisonment for not less than six (6)
years and one (1) day nor more than twelve (12) years, or both,
at the discretion of the court: Provided, That where the violation
consists in failure or refusal to register employees or himself, in
case of the covered self-employed or to deduct contributions
from the employees compensation and remit the same to the SSS,
the penalty shall be a fine of not less Five thousand pesos
(P5,000.00) nor more than Twenty thousand pesos (P20,000.00)
and imprisonment for not less than six (6) years and one (1) day
nor more than twelve (12) years.
"(f) If the act or omission penalized by this Act be committed by
an association, partnership, corporation or any other institution,
its managing head, directors or partners shall be liable for the
penalties provided in this Act for the offense.
"(g) Any employee of the SSS who receives or keeps funds or
property belonging, payable or deliverable to the SSS and who
shall appropriate the same, or shall take or misappropriate, or
shall consent, or through abandonment or negligence, shall
permit any other person to take such property or funds, wholly or
partially, or shall otherwise be guilty of misappropriation of such
funds or property, shall suffer the penalties provided in Article
Two hundred seventeen of the Revised Penal Code.
"(h) Any employer who, after deducting the monthly
contributions or loan amortizations from his employees
compensation, fails to remit the said deduction to the SSS within
thirty (30) days from the date they became due, shall be
presumed to have misappropriated such contributions or loan
amortizations and shall suffer the penalties provided in Article
Three hundred fifteen of the Revised Penal Code.
"(i) Criminal action arising from a violation of the provisions of
this Act may be commenced by the SSS or the employee
concerned either under this Act or in appropriate cases under the
Revised Penal Code: Provided, That such criminal action may be
filed by the SSS in the city or municipality where the SSS office is
located, if the violation was committed within its territorial
jurisdiction or in Metro Manila, at the option of the SSS.
"SEC. 29. Government Aid. - The establishment of the SSS shall not
disqualify the members and employers from receiving such
government assistance, financial or otherwise, as may be
provided.
"SEC. 30. Transitory Clause. - Any employer who is delinquent or
has not remitted all contributions due and payable to the SSS may,
within six (6) months from the effectivity of this Act, remit said
contributions or submit a proposal to pay the same in installment
within a period of not more than twelve (12) months from the
effectivity of this Act without incurring the prescribed penalty,
subject to the implementing rules and regulations which the
Commission may prescribe: Provided, That the employer submits
the corresponding collection lists together with the remittance or
proposal to pay in installments:Provided, further, That in case the
employer fails to remit contributions within the six-month grace
period or defaults in the payment of any amortization provided
the approved proposal, the prescribed penalty shall be imposed
from the time the contributions first became due as provided in
Section 22 (a) hereof."
SEC. 2. Separability Clause. - If any provision of this Act is declared
invalid, the other provisions not affected thereby shall remain
valid.
SEC. 3. Repealing Clause. - All laws, proclamations, executive
orders, rules and regulations or parts thereof inconsistent with
this Act are hereby repealed, modified or amended
accordingly: Provided, That no person shall be deemed to be
vested with any property or other right by virtue of the
enactment or operation of this Act.
SEC. 4. Effectivity Clause. - This Act shall take effect fifteen (15)
days after its complete publication in the Official Gazette or in at
least two (2) national newspapers of general circulation
whichever comes earlier.
Approved: May 01, 1997

(Sgd.) FIDEL V. RAMOS

President of the Philippines